EXHIBIT 10.2

[EXECUTION COPY]

LIMITED PARTNERSHIP AGREEMENT

OF

TEXAS LEHIGH CEMENT COMPANY LP

by and between

TEXAS CEMENT COMPANY

and

LEHIGH PORTLAND CEMENT COMPANY

Dated October 1, 2000

TABLE OF CONTENTS

                                                                                                          Page
                                                                                                          ----
ARTICLE I        DEFINITIONS...............................................................................1
                 1.1.    Definitions.......................................................................1
                 1.2.    Other Definitions.................................................................3

ARTICLE II       CONTINUATION OF THE PARTNERSHIP...........................................................3
                 2.1.    Continuation......................................................................3
                 2.2.    Interests in Partnership..........................................................3
                 2.3.    Name..............................................................................3
                 2.4.    Principal Place of Business.......................................................3
                 2.5.    Registered Agent and Registered Office............................................4
                 2.6.    Purpose and Scope.................................................................4
                 2.7.    Restrictions on Activities; Independent Activities................................4

ARTICLE III      CAPITAL CONTRIBUTIONS.....................................................................4
                 3.1.    Initial Capital Contribution of the Partners......................................4
                 3.2.    Additional Capital................................................................4
                 3.3.    Other Matters Relating to Capital Contributions...................................5
                 3.4.    Tax Indemnification...............................................................5

ARTICLE IV       TERM......................................................................................6

ARTICLE V        the GENERAL PARTNERS; MANAGEMENT OF THE PARTNERSHIP.......................................6
                 5.1.    The General Partners..............................................................6
                 5.2.    Management Committee..............................................................6
                 5.3.    Officers..........................................................................7
                 5.4.    President and Chief Operating Officer.............................................7
                 5.5.    Major Decisions...................................................................8
                 5.6.    Exculpation.......................................................................9
                 5.7.    Indemnification..................................................................10
                 5.8.    Employee Benefits................................................................10
                 5.9.    Services to the Partnership......................................................10
                 5.10.   Tax Matters Partner..............................................................11

ARTICLE VI       the limited partners.....................................................................11
                 6.1.    The Limited Partners.............................................................11
                 6.2.    No Management by the Limited Partners............................................11
                 6.3.    Liability of the Limited Partners................................................11

ARTICLE VII      BOOKS AND RECORDS........................................................................11

ARTICLE VIII     ALLOCATIONS, DISTRIBUTIONS, AND INTERESTS................................................12
                 8.1.    Allocation of Income or Loss.....................................................12
                 8.2.    Distribution of Available Cash...................................................12
                 8.3.    Allocation of Income and Loss and Distributions in Respect of Interests
                         Transferred......................................................................12

ARTICLE IX       Transfers of Interests in Partnership....................................................13
                 9.1.    Prohibited Transfers.............................................................13
                 9.2.    Right of Sale and First Purchase.................................................13
                 9.3.    Transfers by Partners to Affiliates..............................................14

ARTICLE X        Dissolution..............................................................................14
                 10.1.   Dissolution Events...............................................................14
                 10.2.   Termination and Winding Up of Partnership........................................16
                 10.3.   Reserves.........................................................................16
                 10.4.   Cancellation of Partnership Certificate..........................................17
                 10.5.   Option at Dissolution............................................................17
                 10.6.   Closing..........................................................................17

ARTICLE XI       FAILURE TO MAKE CONTRIBUTIONS............................................................18
                 11.1.   Options of Nondelinquent Partners................................................18
                 11.2.   Voting Rights....................................................................18

ARTICLE XII      APPRAISAL................................................................................19
                 12.1.   Selection of Appraisers..........................................................19
                 12.2.   Appointment of Appraisers........................................................19
                 12.3.   Costs of Appraisal...............................................................20

ARTICLE XIII     MISCELLANEOUS............................................................................20
                 13.1.   Individual Indemnification.......................................................20
                 13.2.   Specific Performance.............................................................20
                 13.3.   Notices..........................................................................20
                 13.4.   Assumed Name Certificate.........................................................21
                 13.5.   Ownership........................................................................21
                 13.6.   Limits of Partnership, Authority and Responsibility..............................21
                 13.7.   Arms Length Transactions.........................................................22
                 13.8.   Additional Documents and Acts....................................................22
                 13.9.   Interpretation...................................................................22
                 13.10.  Terms............................................................................22
                 13.11.  Amendment........................................................................22
                 13.12.  References to this Agreement.....................................................22

13.13.  Headings.........................................................................22
13.14.  Severability.....................................................................23
13.15.  No Third Party Beneficiary.......................................................23
13.16.  Binding Effect...................................................................23
13.17.  Counterparts.....................................................................23
13.18.  Complete Agreement...............................................................23

EXHIBITS:

Exhibit A: Market Area

LIMITED PARTNERSHIP AGREEMENT

This Limited Partnership Agreement is made and entered into on September 29, 2000, to be effective as of 12:01 a.m. on October 1, 2000 (the "Effective Date"), between Texas Cement Company, a Nevada corporation ("TCC"), and Lehigh Portland Cement Company, a Pennsylvania corporation ("Lehigh").

RECITALS

Effective as of April 1, 1986 (the "Joint Venture Effective Date"), Texas Cement Company, a Nevada corporation and a predecessor of TCC ("Old TCC"), Centex Cement Enterprises, Inc., a Nevada corporation ("CCE"), and Lehigh formed a joint venture partnership (the "Joint Venture") under the laws of the State of Texas for the purpose of manufacturing, marketing and selling grey cement products. As a result of one or more mergers, assignments and other transactions, TCC currently holds the interest in the Joint Venture formerly held by Old TCC and CCE (the "Original TCC Parties"). The rights, duties and obligations of the parties with regard to the Joint Venture are governed by the Joint Venture Agreement, dated as of March 25, 1986 and effective as of April 1, 1986 (the "Joint Venture Agreement"), between the Original TCC Parties and Lehigh.

As of the Effective Date, the Joint Venture will be converted into a Texas limited partnership (the "Partnership") as a result of the filing of a Certificate of Limited Partnership in the office of the Secretary of State of the State of Texas. Accordingly, the parties desire to enter into this Limited Partnership Agreement in order to provide for certain matters in connection with the conversion of the Joint Venture into the Partnership, which agreement shall, except as expressly stated herein, supersede the Joint Venture Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, TCC and Lehigh hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. When used in this Agreement, the following terms will have the meanings set forth below:

(a) "Act" shall mean the Texas Revised Limited Partnership Act (Tex. Rev. Civ. Stat. Ann. art. 6132a-1), as the same may be amended from time to time, or any successor statute thereto.

(b) "Affiliate" shall mean a person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the person in

question. The term "control", as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. Notwithstanding the foregoing, the Partnership shall not be deemed an Affiliate of any Partner for purposes of this Agreement.

(c) "Agreement" shall mean this Limited Partnership Agreement of the Partnership, as amended from time to time.

(d) "Available Cash" of the Partnership shall mean all cash funds which are available for distribution as determined by the Management Committee.

(e) "Budget" shall mean an annual operating and capital budget to be prepared for the Management Committee, in form and content approved by the Management Committee.

(f) "Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time, or any successor statute thereto.

(g) "Fiscal Year" shall mean the twelve month period ending December 31 of each year.

(h) "General Partners" shall mean the general partners of the Partnership, and "General Partner" shall mean any of the General Partners. (i) "Independent Accountants" shall mean Arthur Andersen LLP or such other nationally recognized accounting firm as may be chosen by the Management Committee.

(j) "Limited Partners" shall mean the limited partners of the Partnership, and "Limited Partner" shall mean any of the Limited Partners.

(k) "Management Committee" shall mean the committee designated, and with the powers and duties as provided, in Article V.

(l) "Market Area" means the geographic area designated in Exhibit A hereto.

(m) "Partners" shall mean the General Partners and the Limited Partners, and "Partner" shall mean any of the Partners.

(n) "Partnership" shall mean the limited partnership continued pursuant to the terms hereof for the limited purposes and scope set forth herein, and for periods prior to the Effective Date, such term shall include the Joint Venture.

(o) "Partnership Percentage Interest" shall mean as to each of TCC and Lehigh, an interest in the capital, profits and losses of the Partnership as follows:

                                         PARTNERSHIP PERCENTAGE INTEREST HELD     PARTNERSHIP PERCENTAGE INTEREST
                                                         AS A                                HELD AS A
                PARTNER                             GENERAL PARTNER                       LIMITED PARTNER
                -------                  ------------------------------------     -------------------------------
TCC                                                        0.1%                                  49.9%
Lehigh                                                     0.1%                                  49.9%

1.2. Other Definitions. The following terms are defined in the sections of this Agreement respectively indicated:

            Term                                      Section
            ----                                      -------
Delinquent Partner                                     11.1
Effective Date                                        Preamble
Joint Venture                                         Preamble
Joint Venture Agreement                               Preamble
Joint Venture Effective Date                          Preamble
Lehigh                                                Preamble
Nondelinquent Partners                                 11.1
Offering Partner                                        9.2(a)
Partnership                                           Preamble
Receiving Partners                                     12.1
Responding Partner                                      9.2(a)
Submitting Partner                                     12.1
TCC                                                   Preamble

ARTICLE II

CONTINUATION OF THE PARTNERSHIP

2.1. Continuation. The Partners do hereby continue the Partnership under the Act for the limited purposes and scope set forth herein and upon the terms, provisions and conditions set forth in this Agreement. Except as otherwise specifically provided in this Agreement, the rights and obligations of the Partners and the continuation, administration and termination of the Partnership shall be governed by the Act.

2.2. Interests in Partnership. Each of the Partners shall have an interest in the capital, profits and losses of the Partnership as specified in this Agreement.

2.3. Name. The name of the Partnership shall be Texas Lehigh Cement Company LP, under which all business and affairs of the Partnership shall be conducted.

2.4. Principal Place of Business. The principal place of business of the Partnership shall be located at Buda, Texas, or at such other place as shall be approved by the Partners.

2.5. Registered Agent and Registered Office. The registered agent for service of process on the Partnership in the State of Texas shall be Corporation Service Company, and the address of such registered agent and of the registered office of the Partnership in the State of Texas shall be 800 Brazos, Suite 750, Austin, Texas 78701.

2.6. Purpose and Scope. Subject to the provisions of this Agreement, the purposes of the Partnership are (a) manufacturing, marketing and selling grey cement products of any type, fly ash and slag, within the Market Area, as set forth in Exhibit A; and (b) doing any and all other acts or things which may be incidental or necessary to carry on the business of the Partnership as herein contemplated.

2.7. Restrictions on Activities; Independent Activities.

No Partner nor any of its Affiliates shall offer to sell or sell any grey cement products, fly ash or slag in the Market Area. Except as is prohibited by the preceding sentence, each Partner, and each of its Affiliates, notwithstanding the existence of this Agreement, may engage in whatever activities it chooses (including without limitation activities in the manufacture and sale of white cement), without having or incurring any obligation to offer any interest in any such activities to the Partnership or any party hereto. Neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Partner or its Affiliates from engaging in such activities, or require participation in such activities by the other Partners, and as a material part of the consideration hereof each Partner hereby waives, relinquishes and renounces any such right of or claim to participation in any such activities.

ARTICLE III

CAPITAL CONTRIBUTIONS

3.1. Initial Capital Contribution of the Partners. Prior to the date hereof, each Partner has made capital contributions to the Partnership as provided in or contemplated by the Joint Venture Agreement. To the extent such provisions have not been fully performed prior to the Effective Date, each Partner shall continue to have such rights and obligations in respect of such capital contributions as are set forth in the provisions of the Joint Venture Agreement relating thereto, including, but not limited to, Article III and
Section 9.3 thereof

3.2. Additional Capital. The Partners understand that from time to time additional capital contributions may be necessary.

(a) When the Management Committee determines from time to time that additional capital contributions are needed by the Partnership, they will so notify the Partners, and the Partners shall make such capital contributions within five business days of notice, prorata in accordance with their respective Partnership Percentage Interests.

(b) If the President and Chief Operating Officer determines that the continued operations of the Partnership are endangered due to the Partnership experiencing negative cash flow and that an immediate infusion of capital is necessary to preserve the

continued operations of the Partnership, he shall determine the amount of capital necessary to preserve the operations of the Partnership and notify the Management Committee of such circumstances and of such amount. By way of example and not limitation, the continued operations of the Partnership would be endangered if the Partnership were unable to meet its obligations in the ordinary course of business, such as payroll. The Management Committee shall meet within five days after such notice, determine the amount, if any, of capital to be contributed and so notify the Partners. If the Management Committee does not meet within five days of such notice or fails to agree upon the amount, if any, of capital to be contributed, the President and Chief Operating officer will notify the Partners of the amount of capital he deems necessary. Each Partner shall contribute to the Partnership its prorata share of the amount designated by the Management Committee, or by the President and Chief Operating Officer if the Management Committee makes no determination of an amount, within five business days of notice to the Partners.

(c) If a Partner fails to make a capital contribution that is required pursuant to Section 3.2(a) or 3.2(b) above, the other Partner may exercise the rights and, remedies as set forth in Article XI at such time.

3.3. Other Matters Relating to Capital Contributions.

(a) Loans by a Partner to the Partnership shall not be considered as capital contributions made to the Partnership.

(b) No Partner shall be entitled to make additional capital contributions in excess of those contributions required or permitted under this Article III.

(c) No Partner shall be entitled to withdraw, or to a return of, any part of its capital contributions made to the Partnership, or to receive property or assets other than cash in return thereof, except as provided in this Agreement.

(d) No Partner shall be entitled to priority over another Partner, either with respect to a return of its capital contributions made to the Partnership, or allocations of income, gains, losses, credits or distributions, except as provided in this Agreement.

(e) No interest shall be paid on capital contributions made to the Partnership.

3.4. Tax Indemnification. The parties to the Joint Venture Agreement agreed to certain tax indemnification provisions set forth in Section 3.10 of the Joint Venture Agreement. Notwithstanding anything to the contrary contained herein, it is expressly understood and agreed that the provisions of Section 3.10 of the Joint Venture Agreement shall survive the execution and delivery of this Agreement and shall thereafter continue in full force and effect; provided, however, that all references in such provisions to "TCC" shall be deemed to refer to TCC instead of the Original TCC Parties.

ARTICLE IV

TERM

The term of the Partnership commenced on the Joint Venture Effective Date and shall continue, unless sooner terminated as provided herein, until March 31, 2016; provided, however, the term of the Partnership will be automatically renewed and extended for an additional period of ten years every ten years commencing April 1, 2016 unless, not more than twenty-four months nor less than twelve months prior to the expiration of a then current term, a General Partner notifies the other General Partner that the Partnership will not be renewed and extended beyond the then current term.

ARTICLE V

THE GENERAL PARTNERS;
MANAGEMENT OF THE PARTNERSHIP

5.1. The General Partners. The General Partners of the Partnership shall be TCC and Lehigh. Except as otherwise expressly provided herein or as required by law, the business of the Partnership shall be managed, conducted and controlled by the General Partners through the Management Committee and by delegation of authority to the officers of the Partnership as provided herein.

5.2. Management Committee. Each General Partner shall appoint two representatives to serve on the Management Committee. Until further notice, the representatives of TCC shall be Steven R. Rowley and Richard D. Jones, Jr. and the representatives of Lehigh shall be Helmut Erhard and Rainer Nobis. Any General Partner may designate at any time and from time to time replacement representatives, for any given meeting, a specified term or an indefinite period, by a written notice of such designation to each other General Partner.

(a) Unless otherwise expressly provided in this Agreement, approval by the Management Committee hereunder shall mean that the action in question has been approved unanimously at a meeting of at least three of the members of the Management Committee upon notice (of at least seven days prior to any meeting), to all members as to the matter to be decided (which notice may be waived).

(b) The Management Committee shall meet at such reasonable times and places as the Management Committee shall choose, either in person or by conference call, as deemed appropriate by any General Partner or the Management Committee. Whenever reasonably requested by any Partner, the Management Committee shall render a just and faithful account of all dealings and transactions relating to the business of the Partnership.

(c) Any action to be taken at a meeting of the Management Committee may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall have been signed by all of the members of the Management Committee. Such consent shall have the same force and effect as a unanimous vote

at a meeting and may be stated as such in any document or instrument filed with the Secretary of State of Texas. The members of the Management Committee may participate in and hold a meeting of the Management Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

5.3. Officers. The personnel to be employed by the Partnership on a full-time basis shall include a President and Chief Operating Officer who shall report to the Management Committee and a Vice President-Marketing, Vice President-Finance and Plant Manager appointed by the Management Committee, who shall report to the President and Chief Operating Officer. The terms of office for such persons shall be one year, and the parties currently holding such offices shall remain in office through the end of the fiscal year in which the Effective Date occurs. If any of these persons does not take such office, then the Management Committee will appoint someone else.

5.4. President and Chief Operating Officer. The President and Chief Operating Officer shall have all the rights and powers as are necessary, advisable or convenient to the management of the business and affairs of the Partnership within guidelines established by the Management Committee. Without limiting the generality of the foregoing, the President and Chief Operating Officer shall have the following rights, duties and powers:

(a) To prepare annually and submit to the Management Committee the Budget; to prepare and submit to the Management Committee, monthly, income statements, statements of partners' capital and changes in financial position and balance sheets; and to submit promptly, from time to time, such other information regarding the operations, assets, business, affairs and financial condition of the Partnership as the Management Committee or any Partner may reasonably request;

(b) To purchase from or through others (i) fidelity bonds with reputable surety companies, covering all persons having access to the Partnership's funds, indemnifying the Partnership against loss resulting from fraud, theft, dishonesty and other wrongful acts of such persons, and (ii) contracts of liability, property, worker's compensation and other insurance as may be required under applicable mortgages, agreements and other instruments and statutes or which the President and Chief Operating Officer deems advisable, appropriate, or convenient for the protection of the assets and affairs of the Partnership or for any purpose convenient or beneficial to the Partnership;

(c) To borrow money under any line of credit established with the approval of the Management Committee;

(d) To sell, dispose of, trade, exchange, convey, quitclaim, lease, surrender, release or abandon the assets of the Partnership which are not necessary to the operations of the Partnership and which have a value in each instance of not more than twenty-five thousand dollars ($25,000) per asset or group of assets sold in one transaction, all upon such terms and

conditions as the President and Chief Operating Officer may deem advisable, appropriate or convenient;

(e) To assign, transfer, pledge, compromise, release or settle any claim of the Partnership for less than full payment or to arbitrate or consent to the arbitration of any of its disputes or controversies or to confess a judgment against the Partnership, to the extent that such claim, dispute, controversy or judgment arises in the ordinary course of business and the amount at issue is less than twenty-five thousand dollars ($25,000);

(f) To hire and discharge employees, determine the scope of their employment, determine their compensation and take all other customary action on behalf of the employer Partnership with regard to all employees of the Partnership, except as provided in Section 5.5(p). However, the positions of President and Chief Operating Officer, Vice President-Marketing, Vice President-Finance and Plant Manager will not fall within this right and power; and

(g) To keep the General Partners equally and fully informed as to all significant matters concerning the Partnership.

5.5. Major Decisions. Except as expressly delegated to the officers of the Partnership, all decisions with respect to the Partnership's business shall require the approval of the Management Committee, including but not limited to the decisions to take any of the following actions:

(a) To borrow money, incur indebtedness, enter into any loan, issue any promissory note, prepay any indebtedness or guarantee any indebtedness or obligation of another other than as permitted by Section 5.4(c) above;

(b) To select, appoint and dismiss the President and Chief Operating Officer, and any other officers who report directly to the President and Chief Operating Officer;

(c) To approve annually the Budget;

(d) To determine the compensation of the President and Chief Operating Officer, and any other officers who report directly to the President and Chief Operating Officer;

(e) To admit a new Partner to the Partnership, except in connection with a transfer by a Partner of an interest to an Affiliate of such Partner within fifteen (15) days after the Effective Date (in which case the Affiliate shall be admitted as a Partner to the Partnership immediately upon the execution by such Affiliate of an appropriate instrument evidencing that it will be bound by the provisions of this Agreement);

(f) To possess Partnership property (real or personal), or assign rights in specific Partnership assets or property (real or personal) for other than Partnership purposes;

(g) To make any capital commitment by the Partnership;

(h) To sell, dispose of, trade, exchange, convey, quitclaim, lease, surrender, release or abandon the assets of the Partnership other than as permitted in Section 5.4(d) above;

(i) To lease as lessee the assets of the Partnership;

(j) To make, execute or deliver any general assignment for the benefit of creditors of the Partnership, or any bond, guarantee, indemnity or surety bond of the Partnership;

(k) To assign, transfer, pledge, compromise, release or settle any claim of the Partnership for less than full payment or to arbitrate or consent to the arbitration of any of its disputes or controversies or to confess a judgment against the Partnership other than as permitted in Section 5.4 above;

(l) To guarantee indebtedness owed by third parties;

(m) To amend or otherwise change this Agreement so as to modify the rights or obligations of the Partners as set forth herein or alter or modify the purpose of the Partnership;

(n) To do any act which would make it impossible to carry on the ordinary business of the Partnership;

(o) To approve the Partnership's tax returns;

(p) To set compensation policy and choose, sponsor, adopt, amend, fund and terminate employee benefit plans;

(q) To approve transactions, other than as provided herein, between the Partnership and any Partner;

(r) To invest the Partnership's funds;

(s) To annually appoint the Independent Accountants;

(t) To permanently shut down any facility of the Partnership; or

(u) To determine distributions of Available Cash of the Partnership.

5.6. Exculpation. Neither the Management Committee nor any member of the Management Committee shall have any liability whatsoever to the Partnership or any Partner, for loss caused by any act or by the failure to do any act; provided, however, that such exculpation from liability shall not apply to any liability for loss caused by an act or by the failure to do any act which arises out of the gross negligence, bad faith, willful misconduct or fraud of the Management Committee or a member thereof, as the case may be. The Management Committee and its members shall not be deemed to be fiduciaries on behalf of the Partnership or the Partners.

5.7. Indemnification.

(a) The Partnership and each General Partner, jointly and severally, shall indemnify any person who was, is or is threatened to be made a named defendant or respondent in a proceeding because the person (i) is or was an officer, employee or agent of the Partnership or member of the Management Committee or (ii) while an officer, employee or agent of the Partnership or member of the Management Committee, is or was serving at the request of the Partnership as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, unless it is determined by the Management Committee that such person was grossly negligent, acted in bad faith or engaged in willful misconduct or fraud. The termination of a proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent is not of itself determinative that the person did not meet the requirements set forth in this Section 5.7.

(b) Notwithstanding the formation of the Partnership, each Partner will remain solely liable for any and all claims, liabilities, costs or expenses which are occasioned by the conduct of the business of such Partner or its Affiliates, and the utilization of the contributed assets by such Partner or any Affiliate, prior to the Joint Venture Effective Date, and will indemnify, defend and hold harmless the other Partners from such claims, liabilities, costs or expenses. This indemnification shall specifically include without limiting the generality of the foregoing, all environmental protection matters regarding assets contributed to the Partnership, including: (i) any claims, obligations, costs and expenses arising at any time from the existence at the Joint Venture Effective Date, of any underground storage tank which is leaking at such time or which, while not leaking at the Joint Venture Effective Date was contributed to the Partnership but was never used or intended to be used by the Partnership;
(ii) any claims, obligations, costs and expenses arising at any time from the existence at such date of any asset containing PCB's in concentrations greater than 50 PPM; and (iii) any claims, obligations, costs or expenses with respect to any remedial action or cleanup required under any federal, state or local law, statute or regulation or other liability arising at any time occasioned by the disposal of wastes at any time prior to the Joint Venture Effective Date; provided, however, that such claims, obligations, costs and expenses shall be indemnified only if, and to the extent, not caused by any act or failure to act of the Partnership or another Partner.

5.8. Employee Benefits. The Management Committee will determine employee benefits for the employees of the Partnership.

5.9. Services to the Partnership. It is contemplated that, from time to time, the Partnership will utilize the various expertise and skills possessed by employees of the General Partners and their Affiliates. The personnel of the General Partners and their Affiliates will be available to provide services to the Partnership, including engineering, geological and legal services, insurance and risk management and tax return preparation, at any reasonable time, as authorized by the Management Committee. Such services will be at the expense of the Partnership, and the charge for such services will be based on the actual cost to the entity providing them. In addition, senior management of the General Partners, or of the members of the General Partners, as applicable, will provide reasonable advisory and consulting services to the Partnership, at no cost to it, as requested by the Management Committee. The members of

the Management Committee shall not receive any fees or compensation for their services on the committee.

5.10. Tax Matters Partner. TCC shall serve as the "tax matters partner" for all purposes under the Code.

ARTICLE VI

THE LIMITED PARTNERS

6.1. The Limited Partners. TCC and Lehigh shall be the limited partners of the Partnership.

6.2. No Management by the Limited Partners. A Limited Partner in its capacity as such shall have no right to, and shall not, take part in the management or control of the Partnership's business or act for or bind the Partnership, and shall have only such rights, powers and privileges as are expressly granted to a Limited Partner in this Agreement or are provided for under the Act.

6.3. Liability of the Limited Partners.

6.4. To the maximum extent permitted by the Act, no Limited Partner shall have any personal liability with respect to the liabilities or obligations of the Partnership, unless such Limited Partner expressly assumes any such liabilities or obligations. No Limited Partner shall be obligated, except as otherwise required by law, either (i) to pay to the Partnership or to any creditor of the Partnership or any other Partner any deficiency in its capital account (it being understood that the obligation of the Limited Partner to make capital contributions to the Partnership is as set forth in Article III), or
(ii) to return to the Partnership or to pay any creditor or any other Partner the amount of any return to it of its capital contribution or other distribution made to it. The obligation of a Limited Partner to make capital contributions to the Partnership in accordance with Article III shall inure to the benefit of the Partnership and the other Partners but shall not give rise to any right of any creditor of the Partnership or other person to require a Limited Partner to make any capital contribution to satisfy any debt, liability or obligation of the Partnership.

ARTICLE VII

BOOKS AND RECORDS

The books and records of the Partnership shall, at the cost and expense of the Partnership, be kept or caused to be kept on the accrual method of accounting, shall reflect all Partnership transactions, and be appropriate and adequate for conducting the Partnership's business. The Partnership shall keep at its principal office the books and records required to be maintained by it under Section 1.07 of the Act. The Management Committee shall cause to be prepared all required tax returns at the Partnership's expense, and shall submit the same to each Partner no later than 30 days prior to the due date of such returns. Each Partner, at its own expense, shall have the right at all times to inspect the books and records of the Partnership

during business hours at the principal place of business of the Partnership. Annually and at the expense of the Partnership, the Independent Accountants shall conduct an audit of the operations of the Partnership and furnish their certified report to the Management Committee no later than 90 days after the end of each fiscal year.

ARTICLE VIII

ALLOCATIONS, DISTRIBUTIONS, AND INTERESTS

8.1. Allocation of Income or Loss. The net income or net loss of the Partnership for each Fiscal Year, and each item of Partnership income, gain, loss and deduction as computed for federal income tax purposes, shall be allocated to the Partners prorata in accordance with their respective Partnership Percentage Interests.

8.2. Distribution of Available Cash. Periodically, but not less frequently than at the end of each Fiscal Year of the Partnership, the Available Cash of the Partnership, if any, shall be distributed to the Partners, prorata in accordance with their Partnership Percentage Interests, at such times and in such amounts as determined by the Management Committee.

8.3. Allocation of Income and Loss and Distributions in Respect of Interests Transferred. If a Partnership Percentage Interest is transferred during any Fiscal Year, the income or loss attributable to such interest for such Fiscal Year shall be divided and allocated proportionately between the transferor and the transferee based upon the number of days during such Fiscal Year for which each party was the owner of the interest transferred; provided, however, that if the Management Committee received a written notice stating that such parties have agreed that such income or loss is to be allocated between them based upon an interim closing of the Partnership books and that such parties agree to pay all expenses incurred by the Partnership in connection with such interim closing, then all such income or loss shall be allocated between the transferor and transferee based upon an interim closing of the Partnership's books and records. Distributions of Partnership assets in respect of an interest in the Partnership shall be made only to the persons or entities who, according to the books and records of the Partnership, are the holders of record of the interests in respect of which such distributions are made on the actual date of distribution. The Partnership shall incur no liability for making distributions in accordance with the provisions of the preceding sentence, whether or not the Management Committee or the Partnership has knowledge or notice of any transfer or purported transfer of ownership of any interest in the Partnership. Notwithstanding any provision of this Section 8.3 to the contrary, income or loss resulting from a sale or other disposition of all or substantially all of the Partnership's assets shall be allocated solely to the parties owning interests in the Partnership as of the date such sale or other disposition occurs.

ARTICLE IX

TRANSFERS OF INTERESTS IN PARTNERSHIP

9.1. Prohibited Transfers. A Partner may sell, transfer, assign or convey all of its interest in the Partnership, but not less than all of its interest in the Partnership, to any person, subject, in each case, however, to the provisions of Sections 9.2 and 9.3. Any act in violation of this Article IX shall be null and void ab initio.

9.2. Right of Sale and First Purchase.

(a) Prior to entering into any contract to sell, transfer, assign or convey all of its interest in the Partnership to a third party (other than pursuant to Section 9.3 herein), or prior to accepting any bona fide offer to purchase, buy or acquire all of its interest in the Partnership from a third party, the Partner making or desiring to accept such offer (and all Affiliates of such Partner, collectively, the "Offering Partner"), shall give written notice of the name of the third party and all the terms, provisions and conditions upon which the Offering Partner desires to sell its interest in the Partnership, or in the case of receipt of a bona fide offer, a copy of the proposed offer containing the name of the third party and all the terms, provisions and conditions of such offer, to the other Partners who are not Affiliates of the Offering Partner (collectively, the "Responding Partner") and the Offering Partner shall offer to sell to the Responding Partner the Offering Partner's interest in the Partnership on the terms, provisions and conditions set forth in such notice.

(b) The Responding Partner shall have a period of 60 days from the date of its receipt of the written notice from the Offering Partner to accept such offer on the terms, provisions and conditions stated in such written notice, which acceptance must be in writing and be received by the Offering Partner prior to the expiration of such 60 day period. Any purported acceptance which materially varies the terms of such offer shall be deemed a rejection thereof for all purposes. The closing of the purchase by the Responding Partner shall be held at the time and place specified in the written notice from the Offering Partner, or such earlier date as is mutually agreed to by the Partners, but in no event later than the day the original offer would have been closed.

(c) In the event the Responding Partner delivers written notice of rejection to the Offering Partner, or in the event the Responding Partner fails to accept the offer in the manner required by Section 9.2(b) hereof, the offer made by the Offering Partner shall be deemed to have been rejected by the Responding Partner and the Offering Partner shall be free to sell, transfer, assign or convey such interest in the Partnership to the third party named, and on the terms, provisions and conditions set forth, in the written notice to the Responding Partner unless, within the 60 day period provided in Section 9.2(b), the Responding Partner gives notice to the Offering Partner that it rejects the proposed transferee, which rejection shall be made in good faith and on a reasonable basis.

If the Offering Partner closes such sale to such third party, the latter shall join in and execute with the Responding Partner a written amendment to this Agreement pursuant to which such third party agrees to be bound by all the terms and provisions of this Agreement

and to perform and discharge the obligations and liabilities which are attributable to the interest acquired by such third party.

(d) In the event that a transaction is not consummated as provided in Section 9.2(c) hereof on or before 180 days after the expiration of the 60 day period provided in Section 9.2(b), or in the event any terms and provisions of such transaction are changed following a rejection by the Responding Partner, no sale, transfer, assignment or conveyance of such interest in the Partnership may be made unless the provisions of this Section 9.2 are again complied with.

(e) In the event that a transaction is consummated as provided in Section 9.2(c) hereof, the purchaser shall become a new Partner in the Partnership, upon compliance with the provisions of Section 9.2(c) hereof, under the terms and provisions of this Agreement, together with all of the rights, duties and obligations pertaining thereto including the rights and restrictions contained in this Article IX with respect to subsequent sales of its interest in the Partnership.

9.3. Transfers by Partners to Affiliates. Notwithstanding any provision in this Article IX to the contrary, each Partner shall be entitled, without the consent of any other Partner, to dispose of all or any portion of its interest in the Partnership to an Affiliate of such assigning Partner; provided, however,
(i) contemporaneously with the disposition of such interest, the Affiliate to whom such interest is disposed shall join in and execute with the other Partners a written amendment to this Agreement pursuant to which such Affiliate agrees to be bound by all the terms and provisions of this Agreement and to perform and discharge the obligations and liabilities which are attributable to the interest acquired by such Affiliate; (ii) that following any such transfer the assigning Partner shall continue to be bound by all the terms and provisions of this Agreement and to perform and discharge its obligations and liabilities under this Agreement as long as any Affiliate of such assigning Partner is a Partner in the Partnership; and (iii) that any such transfer that would cause a technical termination of the Partnership shall not be effected without the prior written consent of each other Partner.

ARTICLE X

DISSOLUTION

10.1. Dissolution Events.

(a) Except as set forth in this Article X, no Partner shall have the right to terminate this Agreement or dissolve the Partnership by its express will or by withdrawal without the consent of each of the other Partners that is not an Affiliate of such Partner.

(b) The Partnership shall be dissolved upon the first to occur of any of the following:

(i) Any General Partner shall (A) voluntarily be adjudicated bankrupt or insolvent, (B) seek, consent to or not contest the appointment of a receiver

or trustee for itself or for all or any part of its property, (C) file a petition seeking relief under the bankruptcy, arrangement, reorganization or other debtor relief laws of the United States or any state or other competent jurisdiction, (D) make a general assignment for the benefit of its creditors, or (E) admit in writing its inability to pay its debts as they mature;

(ii) (A) A petition is filed against any General Partner seeking relief under the bankruptcy, arrangement, reorganization or other debtor relief laws of the United States or any state or other competent jurisdiction, or (B) a court of competent jurisdiction enters an order, judgment or decree appointing, without the consent of said General Partner, a receiver or a trustee for it or for all or any part of its property, and such petition, order, judgment or decree shall remain and shall not be discharged or stayed for 60 days after its entry;

(iii) The interest in the Partnership of any General Partner is seized by a creditor of such General Partner and the same is not released from seizure or bonded out within 30 days from the date of notice of such seizure.

(iv) The Partners unanimously determine to dissolve the Partnership;

(v) The term of the Partnership, as set forth in Article IV above, expires;

(vi) A Partner has sold, transferred, assigned, conveyed or subjected to a security interest its interest in the Partnership in violation of Article IX, and the other Partners who are not Affiliates of such Partner elect thereafter to dissolve the Partnership, provided that such other Partners notify the Partner involved in such prohibited transaction within ninety (90) days after they first learn of such prohibited transaction; or

(vii) A decree of judicial dissolution with respect to the Partnership is entered under Section 8.02 of the Act; or

(viii) There occurs any other event that is required to cause the dissolution of the Partnership under the Act.

(c) Notwithstanding the provisions of Section 10.1(b) above, the Partnership shall not be dissolved if:

(i) In the case of a dissolution resulting from any event specified in clauses (i) through (iii), (v) or (vi) of such provision, within 90 days after the occurrence of such event, all of the Partners (other than the Partner, if any, whose actions or status would otherwise result in the dissolution of the Partnership, and such Partner's Affiliates) agree in writing to continue the business of the Partnership; or

(ii) In the case of a dissolution resulting from an event of withdrawal of a General Partner (as defined in the Act), either (A) there remains at least one General Partner and all of the Partners (other than the Partner whose withdrawal would

otherwise result in the dissolution of the Partnership, and such Partner's Affiliates) agree in writing to continue the business of the Partnership or (B) within 90 days after the occurrence of such event, all of the Partners (other than the Partner whose withdrawal would otherwise result in the dissolution of the Partnership, and such Partner's Affiliates) agree in writing to continue the business of the Partnership and, to the extent they desire or if there are no remaining General Partners, agree to the appointment, effective as of the date of withdrawal, of one or more new General Partners.

(d) Any dissolution of the Partnership shall be effective as of the date on which the event occurs giving rise to such dissolution, but the Partnership shall not terminate unless and until all its affairs have been wound up and its assets distributed as provided in this Article X.

10.2. Termination and Winding Up of Partnership. If the Partnership is dissolved and no purchase is consummated under Section 10.6, an accounting of the Partnership assets, liabilities and operations through the last day of the month in which the dissolution occurs shall be made by the Partnership's Independent Accountants and the affairs of the Partnership shall be wound up and terminated. A liquidating trustee shall be designated by the Management Committee. If the Management Committee is unable to designate the liquidating trustee, he shall be appointed by the then Chief Judge of the District Court of Dallas County, Texas (acting in his nonjudicial capacity or, to the extent he refuses to act in that capacity, in his judicial capacity), upon application of any General Partner. The liquidating trustee shall be responsible for winding up and terminating the affairs of the Partnership and shall determine all matters in connection therewith (including without limitation the arrangements to be made with creditors, to what extent and under what terms the assets of the Partnership are to be sold and the amount or necessity of cash reserves to cover contingent liabilities) as it deems advisable and proper; provided, however, that all decisions of the liquidating trustee shall be made in accordance with the fiduciary duty owed by the liquidating trustee to the Partnership and each of the Partners. The liquidating trustee shall thereafter liquidate the assets of the Partnership as promptly as is consistent with obtaining the fair value thereof and the proceeds therefrom shall be applied and distributed in the following order:

(a) To the expenses of liquidation;

(b) To the payment and discharge of all the Partnership's debts and liabilities to persons other than Partners or former Partners;

(c) To the payment and discharge of any loans and advances made by Partners or former Partners to the Partnership;

(d) To establish and fund any cash reserve fund deemed necessary; and

(e) The balance, if any, shall be distributed to the Partners in accordance with the provisions of Section 8.2 above.

10.3. Reserves. After all of the assets of the Partnership have been distributed, the Partnership shall terminate; but, if at any time thereafter any funds in any cash reserve fund

referred to in Section 10.2 above are released because the need for such cash reserve fund has ended, such funds shall be distributed to the Partners in the same manner as if such distribution had been made pursuant to Section 10.2 above.

10.4. Cancellation of Partnership Certificate. Upon the completion of the winding up of the affairs of the Partnership and the distribution of Partnership Assets as provided in Sections 10.2 and 10.3, the Partnership shall be terminated, and the liquidating trustee shall file or cause to be filed a certificate of cancellation of the Certificate of Limited Partnership of the Partnership in the office of the Secretary of State of Texas, shall cancel all qualifications of the Partnership as a foreign limited partnership in any other jurisdictions and shall take such other actions as it may determine are necessary or appropriate to terminate the Partnership.

10.5. Option at Dissolution. If the Partnership is dissolved pursuant to Paragraphs 10.1(b)(iv), (v) or (vii), any Partner shall have, and, if the Partnership is dissolved pursuant to Paragraphs 10.1(b)(i), (ii), (iii), (vi) or
(viii), any Partner other than the Partner (and such Partner's Affiliates) whose acts or status prompts such dissolution thereunder shall have, and is hereby granted, the right to buy all of the assets, subject to the liabilities, of the Partnership. Prior to offering for sale any of the assets of the Partnership, the liquidating trustee shall, by written notice, offer all of such assets to the Partners entitled to buy same hereunder. If two or more Partners who are not Affiliates desire, are entitled hereunder, and are able to buy such assets, the liquidating trustee shall conduct an open auction in which the highest bidding Partner (as determined by the liquidating trustee) shall be entitled to purchase such assets. If only one Partner, together with its Affiliates, is entitled to buy the assets hereunder, the price therefor shall be the fair market value of those assets attributable to each nonpurchasing Partner's Partnership Percentage Interest and shall be determined through the appraisal procedure under Article XII.

10.6. Closing.

(a) The closing of the sale and purchase of the assets of the Partnership pursuant to Section 10.5 shall occur at the offices of the Partnership in Buda, Texas, within 30 days after the determination of the price for such assets.

(b) At closing of a sale and purchase of the assets of the Partnership pursuant to Section 10.5, the following transactions shall occur:

(i) Each nonpurchasing Partner shall convey and assign all of its right to the assets of the Partnership to each purchasing Partner (or to such other person as a purchasing Partner shall designate to each nonpurchasing Partner), subject to the liabilities of the Partnership, and each nonpurchasing Partner shall execute and deliver to each purchasing Partner all documents which may be required to give effect to the sale and purchase of such assets;

(ii) Each purchasing Partner shall pay or cause to be paid to the liquidating trustee cash in the amount of the applicable purchase price for the assets being purchased and shall deliver to the liquidating trustee an agreement pursuant to which each purchasing Partner agrees to protect, indemnify and hold harmless the liquidating trustee and each nonpurchasing Partner from and against all losses, costs

(including, without limitation, reasonable attorneys' fees and the cost of litigation), expenses, liabilities and obligations which are attributable to each nonpurchasing Partner's interest in the purchased assets and assumed liabilities from and after the date of such sale; and

(iii) The liquidating trustee shall take any necessary action to complete the dissolution, winding up and termination of the Partnership.

ARTICLE XI

FAILURE TO MAKE CONTRIBUTIONS

11.1. Options of Nondelinquent Partners. If any Partner fails to contribute timely any portion of any monetary sum that it is obligated or has otherwise agreed to contribute hereunder (such Partner and any other Partner who is an Affiliate of such Partner being hereinafter referred to as the "Delinquent Partner"), and the other Partners who are not Affiliates of such Partner are not at such time Delinquent Partners, such other Partners (the "Nondelinquent Partners") may, at their option at any time within the 90 day period following notice of default and prior to the date such default is cured, elect any one or more of the following rights and remedies:

(a) Advance the additional capital contribution required of the Delinquent Partner as a loan by the Nondelinquent Partners to the Partnership. Such loan shall be on such terms as the Nondelinquent Partners shall reasonably determine and the interest rate shall be two percent over the "prime" rate of interest quoted from time to time by Bank of America, N.A. (but in no event in excess of the highest lawful rate) from the date of advance until the date repaid. Notwithstanding any other provision herein, all cash flow of the Partnership which is otherwise to be distributed to the Delinquent Partner shall be paid first to the Nondelinquent Partners as interest (and after accrued interest is paid, principal) on such loan until such loan is fully repaid.

(b) Exercise, by notifying the Delinquent Partner thereof, its right to purchase the Partnership Percentage Interest of the Delinquent Partner for the fair market price of the Delinquent Partner's Partnership Percentage Interest as determined through the appraisal procedure under Article XII. The closing of the sale and purchase of an interest pursuant to this Section 11.1(b) shall occur at a place to be determined by the Nondelinquent Partners, within 30 days after the fair market price for such sale and, purchase is determined. Such closing shall be conducted pursuant to the terms and provisions of Section 10.6(b).

Notwithstanding any provision in this Section 11.1 or elsewhere in this Agreement to the contrary, no Partner, except to the extent of its interest in the Partnership, shall have any personal liability with respect to any capital contribution required to be made by such Partner to the Partnership pursuant to Article III above.

11.2. Voting Rights. Until the earliest of (i) the Delinquent Partner's cure of its failure to make the relevant additional capital contribution, (ii) full repayment of the loan made pursuant to Section 11.1(a), or (iii) the closing of the sale and purchase of an interest pursuant to Section 11.1(b), the Delinquent Partner's representatives on the Management Committee shall

have no vote on any matter to be decided or approved by the Management Committee and approval by the Management Committee, for all purposes hereunder, shall mean approval by only the Nondelinquent Partners' representatives on the Management Committee.

ARTICLE XII

APPRAISAL

12.1. Selection of Appraisers. A Partner requesting an appraisal hereunder (hereinafter referred to as the "Submitting Partner") shall serve notice to the other Partners who are not Affiliates of such Partner (hereinafter referred to as the "Receiving Partners") stating that it elects to have the purchase price to be paid pursuant to Section 10.5 or 11.1(b) determined by the appraisal procedures set forth herein and the name of its appraiser. Within ten days after receipt of such notice from the Submitting Partner, the Receiving Partners shall notify the Submitting Partner of the name of their appraiser. Upon appointment, the two appraisers shall be sworn to determine faithfully and fairly the fair market price of each appropriate Partner's interest in the Partnership, or the assets attributable thereto. The Partners shall cooperate with, submit relevant information to, and meet with the appraisers as reasonably requested. The two appraisers shall afford the Submitting Partner and the Receiving Partners the right to submit evidence with respect to the price to be determined and shall, with all possible speed, make their respective determinations in writing and give notice thereof to the Submitting Partner and the Receiving Partners. If there is a variance equal to or less than ten percent in the fair market prices determined by the two appraisers, the average of the prices so determined shall be controlling and shall be binding upon the Submitting Partner and the Receiving Partners. If there is a variance of more than ten percent in the fair market prices determined by the two appraisers, the appraisers, within ten days after both of the appraisers have made their determinations, shall appoint in writing a third appraiser and give written notice of such appointment to the Submitting Partner and the Receiving Partners. If the two appraisers shall fail to appoint or agree upon a third appraiser within the ten day period, a third appraiser shall be selected by the Submitting Partner and the Receiving Partners if they so agree upon such third appraiser within a further period of ten days. If a third appraiser shall not be appointed or agreed upon within the time herein provided, either the Submitting Partner or the Receiving Partners may apply the procedure set forth in Section 12.2. The third appraiser shall be sworn to determine faithfully and fully, pursuant to the procedures set forth above, the question at issue. The third appraiser's determination of price shall be controlling unless it is higher (or lower) than the higher (or lower) determination of price of the original two appraisers, in which case such previous high (or low) determination shall be controlling and binding upon the Partners. The decision of the appraisers under this Section shall be final and binding on the Partners and shall be specifically enforceable in a court having jurisdiction.

12.2. Appointment of Appraisers. If the Receiving Partners fail to appoint an appraiser within ten days after their receipt of the notice from the Submitting Partner setting forth the name of its appraiser, or any person appointed as an appraiser by or on behalf of either the Submitting Partner or the Receiving Partners dies, fails to act, resigns or becomes disqualified and the party by or on behalf of whom such appraiser was appointed shall fail to appoint a substitute appraiser within ten days after being requested to do so by the other party,

then the sole appraiser's determination of the fair market price shall be binding. If a third appraiser is required, but is not appointed as provided in
Section 12.1 above, the appraiser in question shall be appointed by the then Chief Judge of the District Court of Hayes County, Texas (acting in his nonjudicial capacity or, to the extent he refuses to act in that capacity, in his judicial capacity), upon application of either the Submitting Partner or the Receiving Partners.

12.3. Costs of Appraisal. Each party shall bear and pay the cost of the appraiser appointed by (or for) it, and the cost of the third appraiser shall be borne and paid equally by the Submitting Partner and the Receiving Partners. The Submitting Partner and the Receiving Partners shall be given reasonable advance notice of the time and place of any appraisal proceedings, and both shall have the right to be present, heard and represented by counsel. The appraisers shall not have the power to add to or subtract from or otherwise change the terms and provisions of this Agreement, and their determination shall be consistent and in accordance with the terms and provisions of this Agreement. The appraisers shall give prompt notice of their decision to each Partner.

ARTICLE XIII

MISCELLANEOUS

13.1. Individual Indemnification. Any Partner who violates any of the terms, provisions or conditions of this Agreement, or conducts any unauthorized acts binding the Partnership, in addition to being subject to all other remedies, liabilities and obligations that may be imposed upon it therefor, shall indemnify, defend and hold the Partnership and the other Partners that are not Affiliates of such Partner harmless from any and all claims, demands and actions that may arise out of or by reason of such violation or unauthorized acts.

The Partnership shall indemnify, defend and save harmless the Partners, their Affiliates, and all of their respective officers, directors, employees and agents of and from any and all loss, damage or expense incurred by any of them by reason of any act or omission to act on behalf of the Partnership, performed by any of them at the Partnership's direction in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership.

13.2. Specific Performance. Without derogating from any other remedies to which any Partner may be entitled, it is expressly agreed that the remedy at law for breach of any of the obligations set forth in Sections 10.5, 10.6 and 11.1 is inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Partner to comply fully with each of said obligations, and (ii) the uniqueness of the Partnership business and the Partnership relationship. Accordingly, each of the aforesaid obligations shall be, and is hereby expressly made, enforceable by specific performance.

13.3. Notices. Any notice provided or permitted to be given under this Agreement must be in writing, and shall be deemed delivered three days after it is deposited in the United States mail, addressed to the Partner to be notified, postage prepaid, and registered or certified, with a return receipt requested. Notice served in any other manner shall be deemed to have been

given only if and when actually received by the addressee. For purposes of notices the addresses of the Partners shall be as follows:

If to Lehigh:            Lehigh Portland Cement Company
                         7660 Imperial Way
                         Allentown, PA 18195
                         Attention:  President

With a copy to:          Lehigh Portland Cement Company
                         7660 Imperial Way
                         Allentown, PA 18195
                         Attention:  General Counsel

if to TCC:               Texas Cement Company
                         2728 North Harwood
                         6th Floor
                         Dallas, Texas  75201
                         Attention: Steven R. Rowley

With a copy to:          Raymond G. Smerge
                         2728 North Harwood
                         Dallas, Texas  75201

Failure of or delay in delivery of any copy of a notice shall not impair the effectiveness of any notice given to any Partner as specified in this Agreement. Each Partner may change its address for notice by the giving of notice thereof in the manner hereinabove provided.

13.4. Assumed Name Certificate. The Partners shall execute and file any assumed or fictitious name certificate or certificates or any similar documents required by law to be filed in connection with the continuation and operation of the Partnership.

13.5. Ownership. The interest of each Partner in the Partnership shall be personal property for all purposes. All property and interests in property, real or personal, owned by the Partnership shall be deemed owned by the Partnership as an entity, legal title thereto shall be held and conveyed in the name of the Partnership and no Partner, individually, shall have any ownership of such property or interest owned by the Partnership except as tenants in partnership. Each of the Partners does hereby agree to, and does hereby, irrevocably waive, for the term of this Agreement and after dissolution and termination of the Partnership, any right any such Partner might have to cause the Partnership or any of its assets to be partitioned, to compel any sale of all or any portion of the assets of the Partnership pursuant to any applicable law or laws or to file a complaint or to institute any proceeding at law or in equity to cause the termination or dissolution of the Partnership, except as expressly provided for herein. Each Partner hereby acknowledges and agrees that it has been induced to enter into this Agreement in reliance upon the mutual waivers set forth in this Section 13.5, and without such waivers no Partner would have entered into this Agreement.

13.6. Limits of Partnership, Authority and Responsibility. The relationship between and among the parties hereto shall be limited to the carrying on of the business of the Partnership

in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be a limited partnership for the sole and limited purpose of carrying on such business. Except as otherwise provided for or contemplated in this Agreement, nothing herein shall be construed to create a partnership between the Partners nor to authorize any Partner to act as general agent for the other Partner. No Partner, acting alone, shall have any authority to act for, or to undertake or assume any obligation, debt, duty or responsibility on behalf of, any other Partner or the Partnership except as expressly otherwise provided in this Agreement. No Partner nor the Partnership shall be responsible or liable for any indebtedness or obligation of any other Partner incurred either before or after the execution of this Agreement, except those responsibilities, liabilities, debts and obligations heretofore undertaken or incurred in good faith in carrying out the purpose of the Partnership, or hereafter undertaken or incurred on behalf of the Partnership under or pursuant to the terms of this Agreement, or assumed in writing by the Partnership, and each Partner hereby indemnifies and agrees to hold the other Partner harmless from all such obligations and indebtedness except as aforesaid.

13.7. Arms Length Transactions. All transactions of the Partnership with the Partners and their Affiliates will be conducted on an arms length basis except as expressly provided herein.

13.8. Additional Documents and Acts. In connection with this Agreement, as well as all transactions contemplated by this Agreement, each Partner agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement, and all such transactions.

13.9. Interpretation. This Agreement and the rights and obligations of the respective parties hereunder shall be governed by and interpreted and enforced in accordance with the laws of the State of Texas.

13.10. Terms. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or corporation may in the context require. Any reference to the Code or other statutes or laws shall include all amendments, modifications or replacements of the specific sections and provisions concerned.

13.11. Amendment. This Agreement may not be amended, altered or modified except by instrument in writing and signed by the parties hereto.

13.12. References to this Agreement. Numbered or lettered articles, sections and subsections herein contained refer to articles, sections and subsections of this Agreement unless otherwise expressly stated. The words "herein," "hereof," "hereunder," "hereby," "this Agreement" and other similar references shall be construed to mean and include this Agreement and all amendments thereof and supplements thereto unless the context shall clearly indicate or require otherwise.

13.13. Headings. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement.

13.14. Severability. If any provision of this Agreement or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the extent permitted by law.

13.15. No Third Party Beneficiary. This Agreement is made solely and specifically between and for the benefit of the parties hereto, and their respective successors and assigns, subject to the express provisions hereof relating to successors and assigns, and no other person, individual, corporation or entity, whatsoever, shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

13.16. Binding Effect. Subject to the provisions of this Agreement relating to transferability, this Agreement shall be binding upon and inure to the benefit of the parties signatory hereto, and their respective distributees, successors and assigns.

13.17. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement.

13.18. Complete Agreement. This Agreement constitutes the complete and exclusive statement of the agreement between the Partners and replaces and supersedes all prior agreements, by and among the Partners or any of them; provided, however, that the execution and delivery of this Agreement shall not relieve any party to the Joint Venture Agreement of any liability that it may have to any other party (subject to the limitations set forth therein) as a result of any breach occurring prior to the Effective Date of any representation, warranty, covenant, agreement or other term or provision contained in the Joint Venture Agreement. It is agreed that neither Partner has rendered any services to or on behalf of either the other Partner or the Partnership and that no Partner shall have any rights with respect to any services which might be alleged to have been rendered, except as expressly provided herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

TEXAS CEMENT COMPANY

By:  /s/ STEVEN R. ROWLEY
    --------------------------------------
Name:  Steven R. Rowley
Title:   Executive Vice President

LEHIGH PORTLAND CEMENT COMPANY

By:  /s/ HELMUT S. ERHARD
    --------------------------------------
Name:    Helmut S. Erhard
      ------------------------------------
Title:   President and CEO
       -----------------------------------

EXHIBIT 10.2(a)

[EXECUTION COPY]

AMENDMENT NO. 1 TO AGREEMENT OF LIMITED PARTNERSHIP

This Amendment No. 1 to Agreement of Limited Partnership ("Amendment") is entered into effective as of October 2, 2000, by and among Texas Cement Company, a Nevada corporation ("Texas Cement Company"), TLCC LP LLC, a Delaware limited liability company (the "TCC LP Assignee"), TLCC GP LLC, a Delaware limited liability company (the "TCC GP Assignee"), Lehigh Portland Cement Company, a Pennsylvania corporation ("Lehigh"), Lehigh Portland Investments, LLC, a Delaware limited liability company ("Lehigh LP Assignee"), and Lehigh Portland Holdings, LLC, a Delaware limited liability company ("Lehigh GP Assignee"), in order to amend certain provisions of that certain Limited Partnership Agreement of Texas Lehigh Cement Company, dated as of October 1, 2000 (the "Agreement"), by and between Texas Cement Company and Lehigh. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

WHEREAS, pursuant to Section 9.3 of the Agreement, concurrently with the execution and delivery of this Amendment, Texas Cement Company is transferring its 0.1% Partnership Percentage Interest (as defined in the Agreement) as a general partner in Texas Lehigh Cement Company LP (the "Partnership") to TCC GP Assignee, an Affiliate of Texas Cement Company; and

WHEREAS, pursuant to Section 9.3 of the Agreement, concurrently with the execution and delivery of this Amendment, Texas Cement Company is transferring its 49.9% Partnership Percentage Interest as a limited partner in the Partnership to TCC LP Assignee, an Affiliate of Texas Cement Company; and

WHEREAS, pursuant to Section 9.3 of the Agreement, concurrently with the execution and delivery of this Amendment, Lehigh is transferring its 0.1% Partnership Percentage Interest as a general partner in the Partnership to Lehigh GP Assignee, an Affiliate of Lehigh; and

WHEREAS, pursuant to Section 9.3 of the Agreement, concurrently with the execution and delivery of this Amendment, Lehigh is transferring its 49.9% Partnership Percentage Interest as a limited partner in the Partnership to Lehigh LP Assignee, an Affiliate of Lehigh; and

NOW, THEREFORE, it is hereby agreed as follows:

1. Pursuant to Section 9.3 of the Agreement, each of TCC GP Assignee and Lehigh GP Assignee hereby agrees to be bound by all the terms and provisions of the Agreement and to perform and discharge the obligations and liabilities which are attributable to each Partnership Percentage Interest as a general partner in the Partnership acquired by each of TCC GP Assignee and Lehigh GP Assignee; and

2. Pursuant to Section 9.3 of the Agreement, each of TCC LP Assignee and Lehigh LP Assignee hereby agrees to be bound by all the terms and provisions of the Agreement and to perform and discharge the obligations and liabilities which are attributable to each Partnership Percentage Interest as a limited partner in the Partnership acquired by each of TCC LP Assignee and Lehigh LP Assignee; and

3. Pursuant to Section 6.02 of the Texas Revised Limited Partnership Act, each of Texas Cement Company, CCP, CP Service and Lehigh hereby notifies the other in writing of its withdrawal from the Partnership as a general partner of the Partnership.

4. The definition "Partnership Percentage Interest" is hereby amended to read in its entirety as follows:

""Partnership Percentage Interest" shall mean as to each of TLCC GP LLC, a Delaware limited liability company ("TLCC GP"), Lehigh Portland Holdings, LLC, a Delaware limited liability company ("Lehigh GP"), TLCC LP LLC, a Delaware limited liability company ("TLCC LP"), and Lehigh Portland Investments, LLC, a Delaware limited liability company ("Lehigh LP), an interest in the capital, profits and losses of the Partnership as follows:

                                               PARTNERSHIP PERCENTAGE                   PERCENTAGE INTEREST
                                                 INTEREST HELD AS A                      INTEREST HELD AS A
                PARTNER                            GENERAL PARTNER                        LIMITED PARTNER
                -------                        ----------------------                   -------------------
TLCC GP                                               0.1%                                     0.0%
Lehigh GP                                             0.1%                                     0.0%
TLCC LP                                               0.0%                                    49.9%
Lehigh LP                                             0.0%                                    49.9%

Each of TLCC GP and Lehigh GP shall hold its Partnership Percentage Interest in its capacity as a General Partner. Each of TLCC LP and Lehigh LP shall hold its Partnership Percentage Interest in its capacity as a Limited Partner."

5. Section 5.1 of the Agreement is hereby amended to read in its entirety as follows:

"5.1. The General Partners. The General Partners of the Partnership shall be TLCC GP and Lehigh GP. Except as otherwise expressly provided herein or as required by law, the business of the Partnership shall be managed, conducted and controlled by the General Partners through the Management Committee and by delegation of authority to the officers of the Partnership as provided herein."

6. Section 6.1 of the Agreement is hereby amended to read in its entirety as follows:

"6.1. The Limited Partners. TLCC LP and Lehigh LP shall be the limited partners of the Partnership."

7. Section 14.4 of the Agreement is hereby amended to read in its entirety as follows:

"14.4. Notices. Any notice provided or permitted to be given under this Agreement must be in writing, and shall be deemed delivered three days after it is deposited in the United States mail, addressed to the Partner to be notified, postage prepaid, and registered or certified, with a return receipt requested. Notice served in any other manner shall be deemed to have been given only if and when actually received by the addressee. For purposes of notices the addresses of the Partners shall be as follows:

If to Lehigh GP:  Lehigh Portland Holdings, LLC
                  103 Foulk Road, Suite 202
                  Wilmington, Delaware 19803

                         with a copy to:
                         Lehigh Portland Cement Company
                         7660 Imperial Way
                         Allentown, PA 18195
                         Attention: General Counsel

If to Lehigh LP:  Lehigh Portland Investments, LLC
                  103 Foulk Road, Suite 202
                  Wilmington, Delaware 19803

                         with a copy to:
                         Lehigh Portland Cement Company
                         7660 Imperial Way
                         Allentown, PA 18195
                         Attention: General Counsel

If to TLCC GP:    TLCC GP LLC
                  2728 North Harwood
                  Dallas, Texas  75201
                  Attn: Legal Department

                         with a copy to:
                         Texas Cement Company
                         2728 North Harwood
                         Dallas, Texas 75201
                         Attention: Steven R. Rowley

If to TLCC LP:    TLCC LP LLC
                  Corporation Service Company
                  1013 Centre Road
                  Wilmington, Delaware 19805

                         with a copy to:
                         Texas Cement Company
                         2728 North Harwood
                         Dallas, Texas 75201
                         Attention: Steven R. Rowley

Failure of or delay in delivery of any copy of a notice shall not impair the effectiveness of any notice given to any Partner as specified in this Agreement. Each Partner may change its address for notice by the giving of notice thereof in the manner hereinabove provided."

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.

TEXAS CEMENT COMPANY
a Nevada corporation

/s/ RODNEY E. CUMMICKEL
---------------------------------------
By:      Rodney E. Cummickel
Its:     Vice President

TLCC LP LLC
a Delaware limited liability company

/s/ RODNEY E. CUMMICKEL
---------------------------------------
By:      Rodney E. Cummickel
Its:     Manager

TLCC GP LLC
a Delaware limited liability company

/s/ RODNEY E. CUMMICKEL
---------------------------------------
By:      Rodney E. Cummickel
Its:     Manager

LEHIGH PORTLAND CEMENT COMPANY
a Pennsylvania corporation

/s/ HELMUT S. ERHARD
---------------------------------------
By:  Helmut S. Erhard
     ----------------------------------
Its: President and CEO
     ----------------------------------

LEHIGH PORTLAND INVESTMENTS, LLC
a Delaware limited liability company

/s/ LAURENCE A. PRUD'HOMME
---------------------------------------
By:  Laurence A. Prud'homme
     ----------------------------------
Its: Manager
     ----------------------------------

/s/ JONATHAN B. SWAIN
---------------------------------------
By:  Jonathan B. Swain
     ----------------------------------
Its: Manager
     ----------------------------------

/s/ BETH L. PEOPLES
---------------------------------------
By:  Beth L. Peoples
     ----------------------------------
Its: Manager
     ----------------------------------

LEHIGH PORTLAND HOLDINGS, LLC
a Delaware limited liability company

By: Lehigh Portland Cement Company,
Sole Member

/s/ HELMUT S. ERHARD
---------------------------------------
By:  Helmut S. Erhard
     ----------------------------------
Its: President and CEO
     ----------------------------------

EXHIBIT 10.11

Certain confidential information has been omitted from this Exhibit pursuant to a confidential treatment request filed separately with the Commission. The omitted information is indicated by the symbol "***" at each place in the Exhibit where the omitted information appeared in the original.

PAPERBOARD SUPPLY AGREEMENT

This PAPERBOARD SUPPLY AGREEMENT (this "Agreement") is entered into effective the 14th day of May, 1998, by and among REPUBLIC PAPERBOARD COMPANY, a Kansas corporation (hereinafter referred to as "Republic"), REPUBLIC GROUP INCORPORATED, a Delaware corporation ("Republic Parent"), and JAMES HARDIE GYPSUM, INC., a Nevada corporation (hereinafter referred to as "Hardie");

WITNESSETH:

WHEREAS, Republic is proposing to develop a new paperboard mill (the "Project Gazelle Mill") to produce recycled gypsum-grade paperboard;

WHEREAS, potential providers of financing for the Project Gazelle Mill have indicated that they will require Republic to have in place long-term agreements for the sale of a substantial portion of the output of the Project Gazelle Mill as a condition to providing such financing;

WHEREAS, Hardie desires to ensure that it will have an assured supply of paperboard on a long-term basis, and Republic desires to have Hardie as a customer on such basis;

WHEREAS, Republic has offered to Hardie, pursuant to Hardie's request, selling prices and pricing formulas designed to meet pricing proposals offered by other current and potential suppliers competing for Hardie's business;

WHEREAS, Hardie and Republic have entered into that certain letter of intent dated April 8, 1998 in which they expressed their intent to enter into, and outlined their rights and obligations with respect to, a long-term supply agreement for recycled gypsum-grade paperboard;

WHEREAS, Hardie and Republic desire to formalize the terms of such agreement; and

WHEREAS, Republic Parent expects to derive substantial benefit from its subsidiary's entry into such an agreement, and Hardie requires that Republic Parent execute and deliver any such agreement as a condition to its execution and delivery thereof;

NOW, THEREFORE, in consideration of the foregoing, and in consideration of the mutual covenants hereinafter contained, and of other good and valuable consideration, the receipt and sufficiency which are hereby acknowledged, the parties hereto agree as follows:

1. PURCHASE AND SALE OF PRODUCTS. Subject to the terms and conditions of this Agreement, Republic agrees to sell to Hardie, and Hardie agrees to purchase from Republic, at the Selling Price (as hereinafter defined), a portion of Hardie's recycled gypsum-grade paperboard requirements (including Creamface, Grayback, Green-Lined, Brown Sheathing, Shaftwall Liner Green and Veneer Plaster Base paperboard) which is more specifically identified on Exhibit A attached hereto. (Any paperboard products sold or agreed to be sold by Republic to Hardie hereunder are referred to herein as "Products".) Products consisting of Creamface, Grayback, Green-Lined and Brown Sheathing paperboard will be produced at the Project Gazelle Mill, except to the extent expressly permitted hereby to be produced at another of Republic's recycled paperboard mills or as otherwise agreed by the parties. Products consisting of Shaftwall Liner Green and Veneer Plaster Base paperboard may be produced at Republic's recycled paperboard mills other than the Project Gazelle Mill, unless otherwise agreed by the parties.

2. PRICE AND ADJUSTMENTS.

(a) The Selling Price for a particular order shall be computed by a formula whereby an initial base price (the "Base Price") is adjusted as set forth in this paragraph 2 quarterly (other than the adjustments set forth in subparagraphs (c), (d) and (e) of this paragraph 2, which will be made annually), or at such other times or on such other schedule as agreed by the parties, for changes in the cost of certain key grades of paper stock. In each case, the selling price shall be F.O.B. the carrier at the Project Gazelle Mill or when expressly contemplated by this Agreement or when otherwise agreed by the parties at another of Republic's paperboard mills (the "Shipping Mill"). In the event that Republic ships an order from a Shipping Mill other than the Project Gazelle Mill, Republic shall equalize Hardie's freight costs so that Hardie's freight cost is no higher or lower than it would have been had the order been shipped from the Project Gazelle Mill.

(b) The initial Base Prices for the Products shall be as set forth on Exhibit B attached hereto.

(c) As of January 1, 2001, the initial Base Prices of recycled gypsum-grade paperboard will be adjusted upward or downward, as the case may be, for purchases made during calendar year 2001, by an amount per MSF computed as (i) the sum of (A)(x) the difference between the actual average cost during the six (6) months ended November 30, 2000, of purchased electricity per kilowatt hour ("KWH") and the initial projected average base cost of purchased electricity of $*** per KWH, multiplied by (y) the actual total KWH used during such six-month period and (B)(x) the difference between the actual average cost during such six-month period of purchased natural gas, which includes transportation costs and line shrinkage costs, per million British thermal units ("MMBTU") and the initial projected average base cost of purchased natural gas, which includes transportation costs and line shrinkage costs, of $*** per MMBTU, multiplied by (y) the actual total MMBTU's used during such six-month period, divided by (ii) the actual gross thousand square feet ("MSF") of paperboard produced during such six-month period. The same adjustments will be made to be effective each January 1, thereafter, based on the actual costs and quantities during the

twelve-month period ending on November 30 of the preceding year. Hardie shall have the right to review and audit the underlying information and calculations that form the basis for any change in price based upon this subparagraph.

(d) As of January 1, 2002 and each January 1 thereafter, each of the initial Base Prices will be increased or decreased, as the case may be, by an amount equal to the sum of (i) $*** per MSF multiplied by the percentage increase or decrease in the *** Index ***, from September 1997 to the September immediately preceding the effective date of the adjustment, which index is published by the United States Department of Labor, Bureau of Labor Statistics and (ii) $*** per MSF multiplied by the percentage increase or decrease in the*** Index *** from September 1997 to the September immediately preceding the effective date of the adjustment, which index is published by the United States Department of Labor, Bureau of Labor Statistics.

(e) As of January 1, 2002 and each January 1 thereafter, the average basis weight pounds per MSF of each grade of the Products purchased by Hardie during the preceding twelve (12) months shall be calculated. For each one-half pound that the average basis weight for a grade of the Products is less than the average basis weight set forth in Exhibit C for such grade, the initial Base Price for such grade shall be reduced by $*** per MSF. This provision shall apply to reductions of basis weight down to a basis weight of *** pounds per MSF. Republic and Hardie will cooperate with each other in seeking to achieve reductions in the basis weights of the Products. Republic and Hardie each, insofar as their own operations are involved, will diligently pursue methods of achieving, and use commercially reasonable efforts to achieve, reductions in basis weights of the Products, targeting an ultimate basis weight of *** pounds per MSF by the fifth anniversary of the Commercial Production Date. The parties will not be deemed to have succeeded in reducing the basis weight of the Products, and Hardie shall be under no obligation to purchase such lower basis weight Products under this Agreement, unless, all things considered, it is economically feasible for Hardie to utilize such lower basis weight Products in Hardie's manufacturing process. For example, if utilization of the lower basis weight Products causes Hardie to run its equipment at slower speeds to accommodate the lower basis weight paper, such that the loss of production offsets any benefits of a lower basis weight, the parties will not be deemed to have succeeded in reducing the basis weight of the Products. Republic and Hardie each will furnish the other with regular reports on the plans for and the progress of the efforts in achieving lower basis weights.

(f) The Selling Price for Creamface paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c), (d) and (e) of this paragraph 2, for Creamface paperboard by the sum of the positive and negative amounts per MSF computed in (i) through (iv) below, as follows:

(i) (A)(x) the average of the high per ton transacted prices for ***, as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Cream Face (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000);

(ii) (A)(x) the average of the high per ton transacted prices for ***, as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Cream Face (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000);

(iii) (A)(x) the average of the high per ton transacted prices for ***, as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Cream Face (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000); and

(iv) (A)(x) the average of the high per ton transacted prices for ***), as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Cream Face (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000).

(g) The Selling Price for Grayback paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c), (d) and (e) of this paragraph 2, for Grayback paperboard by the sum of the positive and negative amounts per MSF computed in (i) and (ii) below, as follows:

(i) (A)(x) the average of the high per ton transacted prices for ***, as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Gray Back (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000); and

(ii) (A)(x) the average of the high per ton transacted prices for ***, as reported in the second issue of the Official Board Markets during the immediately preceding three calendar months, less (y) the high per ton transacted price for ***, as reported in the second issue of the Official Board Markets during February 1998, multiplied by (B) the assumed percentage of the furnish to be composed of *** (***%), multiplied by (C) the assumed ratio of tons of paper stock required to manufacture one ton of paperboard (***), multiplied by (D) the assumed basis weight of Gray Back (*** pounds/MSF), divided by (E) the number of pounds in a short ton (2,000).

(h) The Selling Price for Green-Lined paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c), (d) and (e) of this paragraph 2, for Green-Lined paperboard by the sum of the positive and negative amounts per MSF computed pursuant to (f)(i) through (f)(iv) above.

(i) The Selling Price for Brown Sheathing paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c), (d) and (e) of this paragraph 2, for Brown Sheathing paperboard by the sum of the positive and negative amounts per MSF computed pursuant to
(g)(i) through (g)(ii) above.

(j) The Selling Price for Shaftwall Liner Green paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c) and
(d) of this paragraph 2, for Shaftwall Liner Green paperboard by the sum of the positive and negative amounts per MSF computed pursuant to (f)(i) through (f)(iv) above; provided, however that an assumed basis weight of *** pounds per MSF shall be used.

(k) The selling price for Veneer Plaster Base paperboard will be computed as of the first day of each calendar quarter during the term of this Agreement by increasing or decreasing the Base Price, as adjusted theretofore pursuant to subparagraphs (c) and
(d) of this paragraph 2, for Veneer Plaster Base paperboard by the sum of the positive and negative amounts per MSF computed pursuant to (g)(i) through (g)(ii) above; provided, however that an assumed basis weight of *** pounds per MSF shall be used.

(l) With respect to shipments to Hardie's Las Vegas, Nevada and Seattle, Washington gypsum wallboard plants, the Selling Prices for each grade of recycled gypsum-grade paperboard will be reduced by a freight allowance, which is provided in acknowledgment of the shipping distances from the Project Gazelle Mill to those plants. The freight allowance will be $*** per MSF with respect to shipments to the Las Vegas, Nevada plant and $*** per MSF with respect to shipments to the Seattle, Washington plant. As of January 1, 2001, and each January 1 thereafter, each of the initial freight allowances will be increased or decreased, as the case may be, by an amount equal to such freight allowance per MSF multiplied by the percentage increase or decrease in the *** from September 1997 to the September immediately preceding the effective date of the adjustment, which index is published by the United States Department of Labor, Bureau of Labor Statistics.

(m) For purposes of this subparagraph (m), Effective FOB Third Party Price ("EFTPP") is the price charged or offered in writing to a Non-Affiliate Third Party (measured on a per/MSF basis) adjusted to take into account any effective price reductions due to all freight, shipping, insurance or other allowances, discounts, rebates, price or credit considerations (as such price may be adjusted from time to time pursuant to Republic's arrangement with the Non-Affiliate Third Party). For purposes of this subparagraph (m), the Western Region is defined as that portion of North America consisting of ***; the Eastern Region is defined as all other portions of North America. If Republic sells or contracts to sell one hundred Tons or more of Product to a Non- Affiliate Third Party or Parties:

(i) all or any portion of which is for delivery in the Eastern Region at an EFTPP lower than the Selling Price, then the Selling Price to Hardie for such Product for any of its plants shall be automatically reduced by the difference between the Selling Price and the EFTPP (the "Adjustment Amount"), for all subsequent Hardie purchases of that Product, up to the volume(s) sold to the Non-Affiliate Third Party or Parties at the EFTPP;

(ii) all or any portion of which is for delivery in the Western Region, at an EFTPP, which is lower than the average of the Selling Price for Hardie's Las Vegas and Seattle plants, after adjustment for the freight allowance as described in paragraph 2(l) plus *** cents (the "Hardie Effective Western Region Price" or HEWRP), the Selling Price for such Product to Hardie for any of its plants shall be automatically reduced by an amount equal to the difference between the HEWRP and the EFTPP (the "Adjustment Amount") for all subsequent Hardie purchases of the Product up to the volume(s) sold to the Non-Affiliate Third Party or Parties.

If a sale or contract to sell that would cause the pricing mechanisms under subparagraphs (i) and (ii) above to be operative occurs during a period that the pricing mechanism under (i) or
(ii) is in effect due to a prior sale or contract to sell with a Non-Affiliated Third Party, then the volumes as to which such prices would be in effect shall be purchased consecutively and not concurrently so that at any particular time the Selling Price would have been reduced by only one Adjustment Amount. In addition to the foregoing, if an EFTPP is established pursuant to a contract whose term or pricing provisions are effective for more than *** ("Long Term Contract") the Selling Price for the Product to Hardie, regardless of volume, shall be automatically reduced by the Adjustment Amount for all subsequent Hardie purchases of the Product so long as said EFTPP is available to the Non-Affiliate Third Party. With respect to Long Term Contracts, the Adjustment Amount shall be based upon the lowest EFTPP in effect at any

given time. The pricing mechanisms set forth in subparagraphs (i) and (ii) above will continue in effect during the time that any Long Term Contract is in effect such that if a sale of the kind described in subparagraphs (i) and (ii) occurs during such time that would cause the Selling Price for a specified volume to be lower than the Selling Price as adjusted pursuant to the Adjustment Amount calculated on the basis of the Long Term Contract, the Selling Price for such specified volume would be such lower price. This subparagraph (m) applies only to recycled gypsum-grade paperboard Products produced at the Project Gazelle Mill and, with respect to Shaftwall Liner Green and Veneer Plaster Base paperboard, to such Products produced at Republic's other paperboard mills, and further shall not apply to test quantities of less than 100 short tons done on an isolated basis and sold to third parties to demonstrate the characteristics of the paperboard manufactured at Republic's paperboard mills. Republic shall cause its outside auditors to certify to Hardie on an annual basis that Republic has complied with this subparagraph.

(n) If any of the high per ton transacted prices referred to in subparagraphs (f) and (g) above cease to be reported monthly or if the indexes referred to in subparagraphs (d) and (l) cease to be published, the parties shall select a similar published statistic or index to use as the basis for making the adjustments provided in subparagraphs (d), (f), (g), (h), (i), (j), (k) or
(l), as the case may be. If the parties cannot agree on such new statistic or index, the parties will resolve such dispute according to the dispute resolution procedures set forth in this Agreement.

3. TERM.

(a) Subject to the provisions of paragraph 12 hereof, the term of this Agreement shall commence on the date hereof and shall terminate on October 1, 2010, or ten (10) years after the Commercial Production Date, whichever is later.

(b) Republic shall diligently pursue the completion of the Project Gazelle Mill and shall use commercially reasonable efforts to cause the Project Gazelle Mill to commence production on or before the date that is 22 months after the date of this Agreement. The obligation of Republic to supply, and, subject to Exhibit A, the obligation of Hardie to purchase, Products hereunder shall not commence until Commercial Production has been achieved (the "Commercial Production Date"). For purposes of this Agreement, "Commercial Production" shall mean that the Project Gazelle Mill has produced, for two consecutive months, paperboard meeting the quality specifications set forth in Exhibit C, in an amount equal to or greater than thirty percent (30%) of the Project Gazelle Mill's planned monthly capacity. When Republic believes that the Project Gazelle Mill has achieved Commercial Production, it shall give written notice to that effect to Hardie

(the "Commencement Notice"), and Hardie shall not unreasonably object to the propriety of the Commencement Notice. From the date on which Hardie receives the Commencement Notice, Hardie shall have fifteen (15) days to: (i) observe the production of paper at the Project Gazelle Mill; (ii) observe the conversion to wallboard of such paper at Republic Parent's wallboard facility in Duke, Oklahoma; and (iii) test the conversion of the paper at each of Hardie's facilities. The Vice Presidents of Production of Hardie and of Republic shall each personally observe the production, conversion and testing under clauses (i), (ii) and
(iii) of the preceding sentence, which shall be performed by the parties in good faith. At the end of such fifteen (15) day testing period, the Commencement Notice shall become effective. If Hardie does not object in writing within fifteen (15) days after the Commencement Notice becomes effective, then Commercial Production shall be deemed to have been achieved as of the date the Commencement Notice became effective. If Hardie does object in writing to the propriety of the Commencement Notice, then the dispute resolution procedures of paragraph 28 shall be invoked, and the achievement of Commercial Production shall be determined in accordance therewith or by subsequent agreement of Republic and Hardie.

(c) Republic shall keep Hardie regularly and adequately informed regarding the construction progress of the Project Gazelle Mill and shall provide Hardie with monthly written progress reports. If Republic is unable to cause the Project Gazelle Mill to commence Commercial Production prior to the later of: (i) October 1, 2000 or (ii) the date that is 22 months after the date of this Agreement, Republic shall supply Hardie, at the prices established pursuant to this Agreement, the quantity of recycled gypsum-grade paperboard that it would otherwise be obligated to supply under this Agreement from its other recycled paperboard mills, through purchases from recycled paperboard mills owned by third parties, or both, until such time as the Project Gazelle Mill commences Commercial Production. Any such recycled gypsum- grade paperboard supplied otherwise than from the Project Gazelle Mill shall have the specifications set forth in Exhibit C hereto, excepting the specifications regarding basis weights. If Republic is unable to supply the quantity and quality of Products required by Hardie under this Agreement at the prices established pursuant to this Agreement, Republic will compensate Hardie for the additional costs reasonably incurred by Hardie in obtaining replacement paperboard. Notwithstanding the foregoing, if, by July 1, 2001, Republic has not given the Commencement Notice, Hardie may, at its sole discretion and option, terminate this Agreement. So long as Republic supplies paper to Hardie from mills other than the Project Gazelle Mill, any adjustments to price shall be based only upon changes in the price of furnish as specified elsewhere in this agreement, and shall not be based upon changes in the cost of gas, electricity, or other expenses.

(d) During the period beginning on October 1, 2005 or the fifth anniversary of the Commercial Production Date, whichever is later, and ending on October 1, 2007 or the seventh anniversary of the Commercial Production Date, whichever is later, Republic and Hardie will negotiate in good faith in an effort to agree to a long-term extension of the initial term of this Agreement or a further long-term supply agreement on such terms as are mutually acceptable to each party, in its sole discretion.

(e) If: (i) Republic sells or otherwise transfers ownership or operating control of the Project Gazelle Mill (otherwise than as a Security Device (as that term is defined below) to obtain or secure financing) to a party that is not an Affiliate (as that term is defined below) of Republic such that Republic no longer maintains a direct or indirect majority ownership interest in the Project Gazelle Mill or is no longer, directly or indirectly, the operator thereof, or a Change of Control (as that term is defined below) of Republic occurs, in either case prior to the sixth anniversary of the Commercial Production Date and (ii) Hardie and Republic (or the then current owner of the Project Gazelle Mill) have not negotiated an extension of the initial term of this Agreement prior to October 1, 2006 or the sixth anniversary of the Commercial Production Date, whichever is later, then the initial term of this Agreement shall automatically, and without any action by Hardie, Republic or the then-current owner of the Project Gazelle Mill or any assignee of Republic's rights hereunder, be extended for an additional five (5) years on the same terms and conditions applicable to the initial term hereof. Notwithstanding the foregoing sentence, Hardie shall have the right, exercisable by Hardie for a period of sixty (60) days beginning on October 1, 2006 or the sixth anniversary of the Commercial Production Date, whichever is later, to terminate such five-year extension by delivering a written notice of such termination to the then-current owner of the Project Gazelle Mill.

(f) For purposes of this Agreement,

(i) an "Affiliate" of a party shall mean any other person who beneficially owns, directly or indirectly, a majority of the voting securities and a majority of the equity securities of such party or of whom a majority of the voting securities and a majority of the equity securities are beneficially owned, directly or indirectly, by such party;

(ii) a "Change of Control" shall be deemed to have occurred with respect to Republic if: (A) Republic Parent, no longer beneficially owns a majority of the voting securities and a majority of the equity securities of Republic; (B) a merger or consolidation of Republic Parent has been consummated pursuant to which a majority of the voting securities and a majority of the equity securities of the surviving or resulting entity are not beneficially owned by the persons

who were the stockholders of Republic Parent immediately prior to the consummation of such merger or consolidation;
(C) a sale or transfer of all or substantially all of the assets of Republic Parent other than to an Affiliate of Republic Parent; (D) the stockholders of Republic Parent have approved a plan or proposal for the liquidation or dissolution of Republic Parent; (E) any person or group (as defined in Rule 13d-5(b) under the Securities Exchange Act of 1934, as amended) (other than Phil Simpson, his spouse, his descendants and their spouses, trusts and estates of which any of them are the primary beneficiaries and any entities of which any of them are holders of a majority of the voting securities and a majority of the equity securities) shall become the beneficial owner of a majority of Republic Parent's voting securities or equity securities; or (F) during any period of two years or less individuals who at the beginning of such period constitute the entire board of directors of Republic Parent shall for any reason cease to constitute a majority thereof unless the election or nomination for election by Republic Parent's stockholders or the appointment by the remaining directors, as applicable, of each new director was approved by a majority of the directors then still in office who were directors at the beginning of the period (for purposes of this subparagraph (f)(ii), Republic Parent shall be deemed to include any successor thereto); and

(iii) "Beneficial ownership" shall be determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

4. PRODUCTS. Republic will supply to Hardie, pursuant to this Agreement, Hardie's requirements (as described in Exhibit A hereto) for recycled gypsum- grade paperboard meeting the specifications set forth on Exhibit C hereto, except as otherwise expressly provided herein.

5. ORDERS AND SHIPMENT.

(a) On or before the twentieth day of each calendar month, Hardie shall deliver to Republic its orders for the next succeeding month specifying the grade, quantity, requested shipment date or dates and destination of the Products being ordered. Orders for Products, unless rightfully rejected when permitted under commercially reasonable standards to be rejected hereunder, will be confirmed by Republic's written acknowledgment (by fax or otherwise), within five (5) business days after each order is placed. All orders and all acknowledgments shall be on the forms attached hereto as Exhibit D and Exhibit E, respectively. Republic may reject any orders that are not on the form attached hereto as Exhibit D or that add any terms thereto. Hardie may reject any acknowledgments that are not on the form attached hereto as Exhibit E or that add any terms thereto.

(b) Shipments of Products shall be routed as determined by Hardie. Hardie shall arrange for delivery of Products and shall notify Republic of its delivery arrangements at the time Hardie places an order for Products with Republic. Title to the Products sold hereunder shall pass from Republic to Hardie when placed F.O.B. the carrier at the Shipping Mill, and Republic shall thereafter be released from all responsibility and liability for any loss of, or damage to, the Products in transit or delivery to Hardie and shall have no responsibility or liability for any delay in delivery, provided that the Products have been properly prepared for shipment and properly delivered F.O.B. the carrier at the Shipping Mill. All shipping and insurance costs shall be at Hardie's expense.

(c) Commencing on October 1, 2000 and at all times thereafter, Republic shall maintain a minimum emergency product inventory of *** tons, meeting Hardie's product specifications as set forth in Exhibit C hereto, in an approximate ratio of sixty percent (60%) Creamface and forty percent (40%) Grayback, *** and which inventory will be maintained at the Project Gazelle Mill and will be paid for as ordered by Hardie, in accordance with the provisions of Paragraph 8 below.

6. QUALITY.

(a) Each grade of the Products to be manufactured and sold by Republic hereunder shall, within the customary commercial tolerances of the paperboard industry for such grade and except as otherwise expressly provided herein, meet the specifications for such grades which are attached hereto as Exhibit C (the "Specifications"), and Hardie agrees that it will accept Products meeting the Specifications. The parties agree that, as a result of their experience hereunder and their technical cooperation under paragraph 9 hereof, the Specifications may be varied by mutual agreement to fit the particular characteristics of Hardie's machinery and products. Such Specifications, when and as modified, shall be deemed to supersede the Specifications attached hereto as Exhibit C, shall become part of this Agreement and are hereby incorporated by reference.

(b) Republic shall provide Hardie a Certificate of Analysis with respect to each set of rolls of the Products purchased by Hardie. The Certificate of Analysis shall be delivered to Hardie no later than the date on which the set of rolls covered thereby are received by Hardie at its gypsum wallboard facility. The Certificate of Analysis shall certify that a sample from the set was physically tested in accordance with testing methods accepted by the recycled paperboard industry. The Certificate of Analysis further shall certify that the sample in question met the Specifications. Republic shall retain samples for six (6) months for purposes of verification of test results.

(c) EXCEPT AS SPECIFIED IN THIS PARAGRAPH 6, REPUBLIC MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS SOLD HEREUNDER AND EXPRESSLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, EITHER EXPRESS OR IMPLIED.

7. CLAIMS.

(a) Hardie shall make a reasonable inspection of the Products and the Certificate of Analysis related thereto upon delivery or within sixty (60) days thereafter. Hardie shall have the right to reject any Products that do not conform to the Specifications. If Hardie believes that any Products do not conform to the Specifications, it shall promptly, and not later than sixty (60) days after receipt thereof, notify Republic in writing of its rejection of such Products for failure to conform to the Specifications. If no such written notice is received by Republic, pursuant to paragraph 21, within sixty (60) days after receipt thereof, Hardie shall be deemed to have accepted the Products, except as set forth in subparagraph (b) below. Republic may inspect any Products that Hardie so rejects. Upon verification by Republic of nonconformity of the rejected Products to the Specifications, Republic will issue Hardie a credit memorandum for the purchase price of the non-conforming Products and the cost of freight from the Project Gazelle Mill to Hardie's plant. Republic will arrange for the disposition of the non-conforming Products, at Republic's expense, in each case within 10 business days after notice of rejection by Hardie, unless the parties agree to some other settlement of the claim in question. If Republic disputes Hardie's rejection of such Products, it shall promptly notify Hardie in writing of such dispute and the dispute will be determined in accordance with subparagraph (c) hereof.

(b) If the nonconformity to the Specifications of any Products could not be discovered through a commercially reasonably inspection prior to their use by Hardie and such use results in the manufacture of defective gypsum wallboard, Hardie shall promptly notify Republic in writing. Republic may inspect such defective wallboard. Upon verification by Republic that the manufacture of the defective wallboard resulted from nonconformity to the Specifications of the Products in question, Republic will issue Hardie a credit memorandum for: (i) the purchase price of the non-conforming Products; (ii) the cost of freight of such Products from the Shipping Mill to Hardie's plant; (iii) additional Products manufactured by Republic and used by Hardie on the other side of such defective wallboard, whether or not such additional Products conform to the Specifications; and (iv) the cost of freight of such additional Products from the Shipping Mill to Hardie's plant. Republic's liability under (i), (ii),
(iii) and (iv) above shall not extend to defective wallboard manufactured after Hardie has discovered, or in the exercise of

commercially reasonable supervision of its manufacturing processes should have discovered, that Hardie is manufacturing defective wallboard. If Republic disputes the cause of the manufacture of the defective gypsum wallboard, it shall promptly notify Hardie in writing of such dispute, and the dispute will be determined in accordance with subparagraph (c) of this paragraph.

(c) Republic's technical support personnel and Hardie's gypsum plant quality personnel shall jointly investigate any disputed rejection of the Products and any dispute regarding a claim that the Products caused the manufacture of defective gypsum wallboard. If such joint investigation fails to settle the dispute to the mutual satisfaction of both parties, it shall be referred to the Vice President, Operations, of each party for settlement. Any dispute that cannot be settled in accordance with this subparagraph (c) will be determined in accordance with paragraph 28 hereof. At Republic's request, Hardie will effect trial runs of Products that it has rejected so long as it can do so without undue effort or expense.

(d) If a Claim (as defined below) is made by a customer, end-user or ultimate consumer that gypsum wallboard manufactured by Hardie that contains a Product is defective and Republic has agreed, or pursuant to subparagraph (c) and/or paragraph 28 hereof or otherwise it has been finally determined, subject to no further rights of appeal or reconsideration, that the failure of such Product to meet the Specifications as of the date of sale of such Product to Hardie has caused the defect in the gypsum wallboard asserted in such Claim and that such failure of the Product to meet Specifications could not have been discovered through a commercially reasonable inspection by Hardie prior to shipment of the gypsum wallboard, then in addition to the credit memorandum issuable pursuant to subparagraph (b) above, Republic shall pay, or reimburse Hardie for, the liability of Hardie to such customer, end-user or ultimate consumer resulting from the defective paperboard and Hardie's reasonable third party expenses in defending against such Claim; provided, that Republic shall not be obligated to pay, or reimburse Hardie for, any such liability unless such liability exceeds $*** with respect to any single Claim or unless the aggregate of all such liabilities with respect to Claims exceeds $*** during any calendar year, in which cases Republic shall be responsible for all such liabilities in excess of such amount or amounts, as applicable. Hardie shall promptly notify Republic of any Claim as to which it intends to seek reimbursement from Republic or which it intends to apply against the $*** limit. Hardie shall, except to the extent not reasonably practicable, afford Republic at least three business days after such notice to inspect the defective gypsum wallboard prior to its demolition or repair. Any authorization by Hardie of repairs shall be for the lowest commercially reasonable method of repair. Hardie shall consult with Republic regarding any settlement of any Claim. Any such settlement not approved by Republic

shall not in any way impair the ability of Republic to dispute the amount of the settlement in connection with any claim by Hardie against Republic for a reimbursement of the related Claim. A "Claim" means a claim that gypsum wallboard sold by Hardie was defective and that relates to a single dwelling, a single tract of dwellings under development by the same owner or developer, or a single structure at a commercial or multi-family residential project.

(e) EXCEPT TO THE EXTENT OTHERWISE PROVIDED IN SUBPARAGRAPH 7(D) ABOVE, REPUBLIC SHALL NOT BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WITH RESPECT TO CLAIMS ASSERTED BY THIRD PARTIES AGAINST HARDIE ARISING FROM DEFECTIVE PRODUCTS OR FROM PRODUCT LIABILITY. REPUBLIC SHALL NOT BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND FOR WHICH IT OTHERWISE HAS LIABILITY FOR LOSSES SUFFERED BY HARDIE AS A RESULT OF A FAILURE OF PRODUCTS TO SUCCESSFULLY CONVERT TO PRODUCE ACCEPTABLE GYPSUM WALLBOARD AT HARDIE'S PLANTS UNLESS HARDIE HAS FIRST USED COMMERCIALLY REASONABLE EFFORTS TO CONVERT THE PRODUCTS INTO GYPSUM WALLBOARD AND SUCH COMMERCIALLY REASONABLE EFFORTS HAVE PROVEN UNSUCCESSFUL.

8. PAYMENT.

(a) Republic shall render its invoices covering shipments as soon as practicable after each shipment. Payment terms shall be net *** days after the date Hardie receives Republic's invoice.

(b) All payments shall be made at Republic's principal place of business or the place specified for payment on the applicable Republic invoice.

(c) All amounts not paid within seven (7) days after the date due hereunder shall bear interest from the date due until paid at a rate equal to the lesser of (i) *** percent (***%) per month or
(ii) the maximum rate permitted under applicable law.

(d) If any invoice remains unpaid over sixty (60) days after the date the invoice is received and the failure to pay is not based upon a bona-fide dispute over whether the amount is owed, Republic may suspend shipments of Products until payment has been made.

9. TECHNICAL COOPERATION.

(a) The parties agree to use commercially reasonable efforts to achieve efficient conversion of the Products at each of Hardie's wallboard manufacturing operations, without creating an undue burden or expense for either party.

(b) Technical support personnel from Republic and production and quality management of each Hardie gypsum wallboard plant shall meet at least monthly to discuss any operating issues being experienced by Hardie that it believes to be related to the Products and opportunities for reducing the basis weight of the Products, so long as there are technical issues that need to be discussed.

(c) In the event that Hardie encounters difficulty converting one or more rolls of the Products that appear to meet the Specifications at any of its gypsum wallboard manufacturing operations, it will promptly give Republic notice of the problems that it is encountering. Not later than five (5) calendar days after receipt of such notice, Republic shall send technical support personnel to the operation experiencing difficulty. Hardie shall permit Republic access to the affected operation for purposes of observation, sampling, testing and inspection, in cooperation with Hardie's personnel. Hardie's facility management and Republic's technical support personnel will mutually develop a plan for reducing problems associated with conversion of the Products, which plan may include, without limitation, trial modifications to the Specifications, trial adjustments to the operation of the gypsum wallboard production line, observations of trials by representatives of both parties, data collection and statistical evaluation of collected data.

10. HARDIE'S REPRESENTATIONS AND WARRANTIES. Hardie hereby makes the following representations and warranties to Republic:

(a) All of the assets of the gypsum wallboard plants located at Nashville, Arkansas, Las Vegas, Nevada and Seattle, Washington referred to in Exhibit A hereto and all of Hardie's gypsum mining facilities are owned by Hardie, free and clear of liens and encumbrances (other than routine matters of record that have no material adverse effect on their value).

(b) The net worth of Hardie as of March 31, 1998, determined in accordance with generally accepted accounting principles, exceeds the consolidated net worth of Republic Parent as of March 31, 1998, as reflected in Republic Parent's

Form 10-Q for the quarter ended March 31, 1998, and no material adverse change in Hardie's net worth has occurred since that date.

(c) Neither Hardie nor any Affiliate of Hardie has any present intention or plan to engage in the manufacture of paperboard, and neither Hardie nor any such Affiliate has received any offer to sell, lease or otherwise convey to Hardie or any such Affiliate a paperboard mill or any interest therein, whether direct or indirect, which offer has not been either withdrawn by the offeror or rejected by Hardie.

11. REPUBLIC'S REPRESENTATIONS AND WARRANTIES. Republic hereby makes the following representations and warranties to Hardie:

(a) The Lawton Industrial Foundation either owns or has acquired options to purchase land in Lawton, Oklahoma sufficient for the construction and operation of the Project Gazelle Mill (the "Land") and has proposed to transfer the Land to Republic.

(b) The Land has access or will have access to truck and rail transportation and loading facilities for same that are appropriate for the efficient operation of the Project Gazelle Mill.

(c) Republic believes it can obtain all necessary permits, approvals, consents, and financing necessary to allow it to construct the Project Gazelle Mill on the Land.

(d) To Republic's knowledge and belief, after investigation, it is feasible to construct the Project Gazelle Mill on the Land.

(e) Republic has engaged consultants and advisors, has conducted test runs with the proposed Project Gazelle Mill technology and, on that basis, Republic believes that the Project Gazelle Mill is technologically feasible and can meet Hardie's needs.

(f) The Project Gazelle Mill will be constructed and outfitted substantially in accordance with the summary descriptions Republic has provided to Hardie, subject to modifications deemed desirable by Republic and, with regard to substantial modifications, agreed to by Hardie, as the project progresses.

(g) Republic, or its agent, has entered into letters of intent with key vendors and contractors.

(h) Republic believes that it can meet Hardie's quantity and quality requirements for recycled gypsum-grade paperboard, tailored to suit the specific

requirements, for both processing and marketing of, and the machinery in operation at, each of its facilities.

(i) Republic is experienced in and knowledgeable concerning the production of recycled gypsum-grade paperboard, and acknowledges that Hardie is relying on such expertise. To Republic's knowledge and belief, after investigation, the Project Gazelle Mill will utilize modified gap-former and Fourdrinier technology, which technology is current recycled paperboard production technology to Republic's knowledge and belief, after investigation. To Republic's knowledge and belief, after investigation, after construction, the Project Gazelle Mill will be viable and will be able to provide, in a timely manner, sufficient recycled gypsum-grade paperboard to meet Hardie's quality and quantity requirements for both processing and marketing for its various gypsum plants within the limits of the projected furnish requirements, energy consumption and labor costs.

(j) Republic believes that it can obtain sufficient financing to construct and operate the Project Gazelle Mill. Republic has received proposals from lenders and investment bankers to lend funds or cause the placement of debt securities sufficient to finance the Project Gazelle Mill.

(k) Republic has reported to Hardie the summary results of its "paper trials" and engineering feasibility studies prepared by Republic's consultants and advisors in connection with the Project Gazelle Mill, and will continue to provide updates thereon to Hardie during the course of development of the Project Gazelle Mill.

(l) Republic anticipates that it initially will sell up to twenty- five percent of the capacity of the Project Gazelle Mill to its own gypsum plant in Duke, Oklahoma.

12. OTHER COVENANTS OF REPUBLIC.

(a) Republic will review and become familiar with the process requirements and unique needs of Hardie's gypsum facilities and equipment.

(b) Republic will obtain performance guarantees and warranties from its key vendors and contractors.

13. OTHER COVENANTS OF HARDIE. Until the later of October 1, 2005 or the fifth anniversary of the Commercial Production Date, Hardie will promptly advise Republic in writing if it or any United States Affiliate of Hardie offers to buy, lease or otherwise acquire any North American paperboard mill, or any interest therein, whether direct or indirect.

14. TERMINATION. In the event of a material breach of this Agreement, either party shall give written notice to the defaulting party of the breach and of the non-defaulting party's intention to terminate this Agreement if the non- defaulting party is not, within thirty (30) days from and after receipt of the written notice of default, provided with a plan of corrective action and if substantial efforts to cure the default in accordance with the plan have not commenced. If such substantial efforts to cure the default as provided above have not commenced within such thirty (30) day period, the non-defaulting party may terminate this Agreement by sending written notice to the other party of such termination, whereupon this Agreement shall terminate and the non- defaulting party, subject to the terms of this Agreement, shall be entitled to pursue any remedies provided by law. In the event the non-defaulting party elects to terminate this Agreement, the notice of termination must be sent to the defaulting party within five (5) days after the expiration of the thirty
(30) day period first mentioned above. The failure of any party to exercise its option to terminate this Agreement shall not affect any other rights the party may have in law or equity.

15. FORCE MAJEURE.

(a) In the event of an Act of God, explosion, accident, fire, drought, flood, earthquake, tornado, hurricane, strike, labor disturbance, insurrection, riot, war, act of a public enemy, the acts or orders of a governmental unit, freight embargo, power or utility shortage, or any other similar cause beyond Republic's or Hardie's reasonable control, interfering with the production, supply, transportation or consumption of the Products or with the supply of raw materials or utilities used in connection therewith (a "Force Majeure Event"), the obligation of Republic to supply, and the obligation of Hardie to purchase, Products hereunder shall be proportionately reduced or held in abeyance for the duration of the Force Majeure Event and the term of this Agreement shall be extended for a period equal thereto. The failure or inability of any one or all of Republic's advisors, agents, consultants, designers, engineers, lenders, suppliers or vendors to perform their contractual or other obligations to Republic in connection with the development, construction or operation of the Gazelle Mill shall not be considered a Force Majeure Event. The affected party shall promptly notify the other of any Force Majeure Event, and the expected duration of the party's inability to perform under the terms of this Agreement. If a Force Majeure Event results in or may reasonably be expected to result in an inability of Republic to ship Products for more than seven days past their scheduled shipping dates, then Hardie may purchase the Products covered by any orders so affected by the Force Majeure Event from other suppliers. NEITHER REPUBLIC NOR HARDIE SHALL BE LIABLE FOR ANY DAMAGES, DIRECT OR CONSEQUENTIAL, ARISING OUT OF ANY DELAY IN DELIVERY OR FAILURE TO DELIVER OR ACCEPT ANY OF THE PRODUCTS SOLD HEREUNDER IF SUCH DELAY OR FAILURE TO DELIVER OR ACCEPT IS DUE TO A FORCE MAJEURE EVENT FOR WHICH APPROPRIATE NOTICE HAS BEEN GIVEN.

(b) Any suspension or reduction of deliveries of Products under this Agreement due to the occurrence of any Force Majeure Event shall not invalidate or be a basis for termination of this Agreement, and, upon the removal or termination of the Force Majeure Event during the term of this Agreement, delivery shall be made and taken, as the case may be, on the specified terms in effect immediately prior to such suspension or reduction. The foregoing notwithstanding, if Republic is unable to resume shipments of Products from the Project Gazelle Mill within one hundred eighty
(180) days after the occurrence of a Force Majeure Event, Hardie may, in its sole discretion, terminate this Agreement, with no further obligation to Republic.

(c) If in consequence of any Force Majeure Event, Republic's production is partially curtailed, Republic shall limit its reductions of shipments to its then-present customers to the same percentage in each case.

(d) The provisions of this paragraph 15 shall not be available to any party hereto that shall fail to use reasonable diligence to remedy the situation and that shall fail to remove the Force Majeure Event affecting its performance hereunder with all reasonable dispatch, or to give timely notice of the occurrence of the Force Majeure Event. The requirement that any Force Majeure Event be remedied with all reasonable dispatch shall not require the settlement of strikes or labor controversies by acceding to the demands of the opposing party or parties.

16. MUTUAL INDEMNIFICATION. Except as otherwise expressly provided herein, Republic shall indemnify and hold harmless Hardie and its Affiliates and each of the heirs, executors, successors and assigns of Hardie or any such Affiliate from and against, and will pay the amount of, any loss, liability, claim, damage, obligation, fine, proceeding and expense (including reasonable costs of investigation and defense and reasonable attorney's fees and other incidental costs and expenses) suffered or incurred by Hardie arising from, relating to or in connection with: (i) any breach of any representation or warranty made by Republic in this Agreement; (ii) any breach by Republic of any covenant or obligation of Republic in this Agreement, including any such breach caused by the failure of any of Republic's contractors or suppliers to fulfill their obligations to Republic in connection with the development or construction of the Project Gazelle Mill; or (iii) any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses (including reasonable legal fees and expenses) incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof or in enforcing this indemnity. Except as otherwise expressly provided herein, Hardie shall indemnify and hold harmless Republic and its Affiliates and each of the heirs, executors, successors and assigns of Republic or any such Affiliate from and against, and will pay the amount of, any loss, liability, claim, damage, obligation, fine, proceeding and expense (including reasonable costs of investigation and defense and reasonable attorney's fees and other incidental costs and expenses) suffered or incurred by Republic arising from, relating to or in connection with: (x) any breach of any representation or warranty made by Hardie in this Agreement; (y) any breach by Hardie of its obligations under this Agreement; or (z) any and all actions, suits, proceedings, claims, demands,

assessments, judgments, costs and expenses (including reasonable legal fees and expenses) incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof or in enforcing this indemnity.

17. BANKRUPTCY. In the event of any voluntary or involuntary bankruptcy, receivership, insolvency or reorganization proceedings involving either party or its property, or the assignment of all, or substantially all, of the assets of either party for the benefit of creditors, or a receiver is appointed for it or any substantial part of its property, the other party may terminate its obligations hereunder by giving written notice of such termination which shall become effective upon the giving of such notice. Such right of termination shall be in addition to, and not in lieu of, any other rights or remedies available to the non-breaching party.

18. ASSIGNMENT.

(a) This Agreement shall be binding upon and inure to the benefit of the successors of the parties hereto but shall not be assignable by either party without the written consent of the other party except:

(i) subject to compliance with the other subparagraphs of this paragraph 18, this Agreement may be assigned by operation of law to the surviving or resulting entity in connection with a merger or consolidation of such party;

(ii) subject to compliance with the other subparagraphs of this paragraph 18, this Agreement may be assigned by either party to the purchaser or transferee of substantially all the other assets of the assigning party in connection with a sale or other transfer of all or substantially all of the assets of the assigning party;

(iii) subject to compliance with the other subparagraphs of this paragraph 18, Hardie may assign this Agreement to the purchaser or transferee of all of Hardie's gypsum wallboard manufacturing plants referenced on Exhibit A hereto (the "Hardie Plants") or Hardie may assign its rights under this Agreement insofar as they relate to any Hardie Plant to the purchaser or transferee of such Hardie Plant;

(iv) subject to compliance with the other subparagraphs of this paragraph 18, Republic may assign this Agreement to a purchaser or transferee of the Project Gazelle Mill;

(v) nothing in this Agreement shall prevent Hardie or Republic from entering into a mortgage, deed of trust, grant of a security interest, sale and leaseback or other security device (a "Security Device") with respect to any or all of the Hardie Gypsum Plants or the Project Gazelle Mill, respectively, to obtain or secure financing; provided,

that any such Security Device shall expressly provide and require that upon any foreclosure, taking, lease termination or other exercise of remedies pursuant thereto, the parties thereto shall take all such action as shall be required to cause the person or persons owning or controlling the Hardie Gypsum Plants or the Project Gazelle Mill, as applicable, after such exercise of remedies to assume in writing the provisions of this Agreement insofar as they relate to the Hardie Gypsum Plant or the Project Gazelle Mill, as applicable, owned or controlled by such person; provided, further, that Republic shall not enter into any such Security Device with respect to the Project Gazelle Mill without a provision in the Security Device that obligates the secured party to give Hardie notice of any proposed exercise of remedies affecting the Project Gazelle Mill with respect to a default by Republic thereunder, and without first providing such language to Hardie.

(b) Notwithstanding subparagraph (a) above, in the event that Hardie shall merge or consolidate with another entity or sell or otherwise transfer any of the Hardie Plants (whether pursuant to a sale or transfer of all or substantially all of its assets or the sale or transfer of one or more of the Hardie Plants), Hardie shall require the surviving company in such merger or any such transferee to assume and agree to perform in writing the provisions of this Agreement for the full term of this Agreement (or if less than all the Hardie Plants are sold or transferred, then the provisions of this Agreement insofar as they relate to the Hardie Plants sold or transferred), and in the event that Republic shall merge or consolidate with another entity or sell or transfer the Project Gazelle Mill, Republic shall require the surviving company in such merger or any such transferee to assume and agree to perform in writing the provisions of this Agreement for the full term of this Agreement.

(c) No such assignment or assumption of this Agreement, in whole or in part, shall relieve the assigning party of any of its obligations hereunder.

(d) If Republic proposes to sell, transfer or otherwise dispose of the Project Gazelle Mill (other than pursuant to a Security Device that complies with paragraph 18(a)(v) hereof) or merge or consolidate with another entity or sell or transfer all or substantially all of its assets to another person, or receives any bona fide, firm proposal from a third party to purchase or otherwise acquire the Project Gazelle Mill or for the merger or consolidation of Republic into or with another entity or for the sale of all or substantially all its assets to another person which proposal it proposes to accept, then Republic must first:
(i) promptly inform Hardie that Republic intends to so dispose of the Project Gazelle Mill and (ii) keep Hardie informed of the progress Republic is making in disposing of the Project Gazelle
Mill. Republic shall consult with Hardie concerning methods of ensuring, and shall

take commercially reasonable steps to ensure, that any disposition of the Project Gazelle Mill will not have a material adverse effect on Hardie. Nothing contained herein shall prevent Hardie, upon receipt of any such notice from Republic, from making an offer to Republic to acquire the Project Gazelle Mill.

19. CONFIDENTIALITY.

(a) Hardie and Republic acknowledge and agree that they may come into possession of certain information about each other's operations, either through visits to each other's facilities or through an exchange of documents or other information, including, but not limited to, specific designs and specifications of their respective facilities, the speed, throughput and other performance characteristics of their respective facilities, their cost of production and the specifications and selling prices of their products, all of which are confidential and proprietary information of the respective parties (the "Confidential Information"). Hardie and Republic further acknowledge and agree that the other would be damaged by the disclosure of the Confidential Information to competitors or to others, and by the use of the Confidential Information to compete with the other. Accordingly, each of Hardie and Republic agrees that it will maintain the confidentiality of, and not disclose to persons other than its employees with a specific need to know such information and who have been advised of and who have agreed to be bound by this covenant, any of the Confidential Information, or use such Confidential Information to compete with the other.

(b) "Confidential Information" does not include information which:
(i) is or becomes generally available to the public other than as a result of a disclosure by the receiving party, its Affiliates or employees; (ii) was within the possession of the receiving party, its Affiliates or employees prior to its being furnished to such party by or on behalf of the furnishing party, provided that the source of such information was not known by the receiving party, its Affiliates or employees to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the furnishing party or any other party with respect to such information; or (iii) becomes available to the receiving party on a non-confidential basis from a source other than Republic or any of its Affiliates or employees, provided that such source is not bound by a confidentiality agreement with or other contractual legal or fiduciary obligation of confidentiality to the furnishing party or any other party with respect to such information. Notwithstanding any other provision of this Agreement, the Confidentiality Agreement dated March 4, 1997 between Republic Parent and James Hardie Industries (USA) Inc. shall remain in full force and effect. To the extent there is any conflict between such Confidentiality Agreement and this Agreement, this Agreement shall control.

(c) In the event that Hardie or Republic or any of their Affiliates or employees are requested or required (by deposition, interrogatories, request for information or documents, subpoena, civil investigative demand or other similar process in legal proceedings) to disclose any of the other's Confidential Information, the receiving party shall provide the furnishing party with prompt written notice of any such request or requirement so that it may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Paragraph. If, in the absence of a protective order or other remedy or the receipt of a waiver from the furnishing party, the receiving party or any of its Affiliates or employees are nonetheless, in the opinion of counsel, legally compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt or suffer other censure or penalty, the receiving party or its Affiliates or employees may, without liability hereunder, disclose to such tribunal only that portion of the Confidential Information which such counsel advises the receiving party is legally required to be disclosed, provided that the receiving party exercises its commercially reasonable efforts to preserve the confidentiality of the Confidential Information including, without limitation, by cooperating with the furnishing party to attempt to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information by such tribunal. The furnishing party will promptly reimburse the receiving party for any and all costs and expenses (including attorneys' fees and expenses) which it may suffer or incur as a result of its compliance with this subparagraph (c) unless the proceeding in which such disclosure is being sought results in substantial part from a breach by the receiving party of its obligations hereunder.

20. NON-SOLICITATION. Hardie and Republic each agree that, during the term of this Agreement and for a period of one year thereafter, it will not, and will not permit any of its Affiliates to, directly solicit, other than through normal advertising for employees, or knowingly hire, any former, present or future management employee, engineer, technician or salesperson of the other; provided, that this paragraph 20 shall not apply to any person who has not been employed by the other party or its Affiliates for a period of at least one year.

21. NOTICES. All notices, requests or other communications hereunder shall be in writing, addressed to Republic or Hardie at the following addresses:

REPUBLIC PAPERBOARD COMPANY OR REPUBLIC GROUP INCORPORATED

(for notices by personal delivery, overnight express or telecopy):

811 East 30th Avenue
Hutchinson, Kansas 67502
Attention: Mr. Doyle R. Ramsey Telecopier: (316) 727-2727

(for notices by registered or certified mail):

P.O. Box 1307
Hutchinson, Kansas 67504-1307 Attn: Mr. Doyle R. Ramsey

with a copy to:

Bryan E. Bishop, Esq.
. Locke Purnell Rain Harrell 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201 Telecopier: (214) 740-8800

JAMES HARDIE GYPSUM, INC.

26300 La Alameda, Suite 250
Mission Viejo, California 92691

Attention: Mr. Robert F. Rugg
Telecopier: (949) 367-1294

with a copy to:

Howard J. Barnhorst, Esq.

Barnhorst, Schreiner & Goonan
550 West C St., Ste. 1350
San Diego, CA 92101

Telecopier: (619) 544-0703

The address of either party may be changed by giving notice in writing at any time to the other party. Any notice to be given under this Agreement shall be deemed duly given if: (i) delivered personally; (ii) sent by telecopy (if followed by delivery of a hard copy by first class mail, postage prepaid); (iii) delivered by overnight express; or (iv) sent by United States registered or certified mail, postage prepaid. Any notice that is delivered personally, or sent by telecopy or overnight express in the manner provided herein shall be deemed to have been duly given to the party to whom it is directed upon actual receipt by such party. Any notice that is addressed and mailed in the manner provided herein shall be conclusively presumed to have been given to the party to which it is addressed at the close of business, local time of the recipient, on the third day after it is so placed in the mail.

22. NON-WAIVER. The failure of either party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement or to take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of any such rights, but the same shall continue and remain in full force and effect.

23. ENTIRE AGREEMENT. This Agreement (including the Exhibits hereto which are an integral part hereof) sets forth the entire agreement between the parties hereto with respect to the subject matter hereof, and the parties shall not be bound by any representations or agreements which are not expressly set forth in this Agreement.

24. AMENDMENTS. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing signed by an authorized officer of each of the parties hereto.

25. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which together shall constitute one and the same instrument.

26. CAPTIONS. The captions of the various paragraphs of this Agreement are for convenience of reference only and shall not affect the interpretation of the provisions hereof.

27. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas (other than its choice of law principles).

28. DISPUTE RESOLUTION; MEDIATION AND ARBITRATION.

(a) If any controversy, dispute, difference or claim between the parties hereto shall arise concerning the performance, enforcement or interpretation of this Agreement (collectively, a "Dispute"), prior to the initiation of any proceedings pursuant to any other provisions of this paragraph 28, the Dispute shall be referred to the chief executive officers of Republic and Hardie for resolution.

(b) If a Dispute is not resolved pursuant to subparagraph (a) within fifteen (15) business days after it is referred to the chief executive officers of Republic and Hardie, either party may by notice to the other party require mediation of the Dispute. Each party agrees to participate in mediation of the Dispute and will in good faith attempt to agree upon a mediator. If the parties are unable to agree upon a mediator within ten (10) business days after such notice or if such Dispute shall not have been resolved by mediation within twenty (20) business days after such notice, then either party may file for arbitration pursuant to subparagraph (c) below. All expenses of the mediator shall be equally shared.

(c) If the parties to this Agreement are unable to settle a Dispute through direct negotiation in good faith or through mediation pursuant to subparagraphs (a) and (b) within the time period specified therein, the Dispute shall be submitted to binding arbitration. Except as otherwise provided herein, the arbitration shall be conducted in accordance with the then effective Commercial Rules of Practice and Procedure of American Arbitration

Association ("AAA"). The arbitration proceedings shall take place in Dallas, Texas.

(d) Within five (5) business days after notice from one party to the other requesting binding arbitration, the parties shall agree on and select one arbitrator from the AAA panel. If within such five
(5) business-day period, the parties are unable to agree upon an arbitrator, each of them shall have five (5) business days following the expiration of that period to select an arbitrator from the AAA panel that is not an affiliate of a party to this Agreement. If either party fails to timely select an arbitrator, AAA shall make the selection for such party. Within five (5) business days following their selection, the two selected arbitrators shall agree upon and select a third arbitrator for the AAA panel. The arbitrator or arbitrators, whether one or three persons, are hereinafter called "Arbitrators." If the parties are unable to agree on a time and place in Dallas, Texas for arbitration, the Arbitrators shall decide the time and place. The Arbitrators shall hear the matter within thirty (30) days after selection and shall render a decision promptly after the hearing. The Arbitrators shall make a final decision that, in their judgment, (i) is consistent with, and does not add to, subtract from, or otherwise modify, the provisions of this Agreement or related agreements or (ii) if the subject matter of the Dispute is not specifically addressed in this Agreement, is determined under this Agreement consistent with the intent of the parties as supported by evidence presented in the arbitration proceedings. The Arbitrators shall send a signed written statement of their decision to AAA and both parties. In awarding damages or other remedies or relief, the Arbitrators must honor and abide by any applicable limitations or restrictions expressed or described in the Agreement. The Arbitrators are not empowered to award damages in excess of compensatory damages, and each party hereby irrevocably waives any right to recover such damages with respect to any Dispute resolved by arbitration.

(e) To the extent permissible under Texas law, the parties agree that the award of the Arbitrators shall be final and not subject to judicial review. Judgment on the arbitration award may be entered and enforced in any court having jurisdiction over the parties or their respective assets. It is the intent of the parties that the arbitration provisions hereof be enforced to the fullest extent permitted by Texas law.

(f) Nothing in the foregoing arbitration provisions shall limit the rights of the parties otherwise described in this Agreement to obtain provisional, ancillary, or equitable remedies, such as injunctive relief or specific performance.

(g) Each party shall pay its own expenses of arbitration and the expenses of the Arbitrators shall be equally shared; provided, however, if in the opinion of the Arbitrators any claim by either party hereunder or any defense or

objection thereto by the other party was unreasonable and not made in good faith, the Arbitrators may assess, as part of the award, all or any part of the arbitration expense (including, without limitation, reasonable attorneys' fees) of the other party and of the Arbitrators against the party raising such unreasonable claim, defense, or objection. Nothing herein set forth shall prevent the parties from settling any dispute by mutual agreement at any time.

29. SPECIFIC PERFORMANCE; INJUNCTIVE AND OTHER EQUITABLE RELIEF. Each party hereto acknowledges that a violation or attempted violation of any of the covenants and agreements in paragraphs 3(e), 16, 17, 18 and 19 hereof, and in

Exhibit A hereof, will cause such damage to the other party as will be irreparable, the exact amount of which would be difficult or impossible to ascertain and for which there will be no adequate remedy at law, agrees that the other party hereto shall be entitled as a matter of right to specific performance and injunctive and other equitable relief in case of such violation or attempted violation as well as any and all costs and expenses sustained or incurred in obtaining any such equitable relief, including, without limitation, reasonable attorneys' fees, and agrees to waive any requirement for the securing or posting of any bond or other security in connection with the obtaining of any such injunction or other equitable relief.

30. PUBLIC ANNOUNCEMENTS. Neither Hardie nor Republic shall make, nor permit any Affiliate or representative to make, any public statements, including, without limitation, any press releases, with respect to this Agreement or the transactions contemplated thereby without the prior written consent of the other parties hereto, except to the extent required by law or the rules of any national securities exchange or automated quotation system on which such party's securities are listed or traded.

31. TIME OF THE ESSENCE. With regard only to the dates specified in: (i) the last sentence of paragraph 3(c) hereof; (ii) the last sentence of paragraph 3(e) hereof; and (iii) the last sentence of paragraph 15(b), time is of the essence.

32. NO JOINT VENTURE. The parties hereto have not entered into any partnership, joint venture, agency or other such relationship by virtue of this Agreement.

[The remainder of this page is intentionally left blank.]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by the respective officers as of the date first written above.

REPUBLIC PAPERBOARD COMPANY

By:   /s/ Phil Simpson
    -------------------------------
      Phil Simpson, Chairman of the
      Board, President and Chief
      Executive Officer

JAMES HARDIE GYPSUM, INC.

By:   /s/ Robert F. Rugg
    -------------------------------
      Robert F. Rugg, President

Republic Parent shall cause Republic to perform, and hereby guarantees the performance by Republic of, all of Republic's obligations under this Agreement. The obligations of Republic Parent under this paragraph shall not be modified, released, diminished or affected by: (i) any modification, amendment, waiver, release, adjustment, indulgence, forbearance, compromise, deferral or extension of or with respect to any obligations of Republic hereunder; (ii) any delay or forbearance or lack of diligence by Hardie in exercising its rights hereunder against Republic; (iii) the bankruptcy, insolvency, rearrangement, adjustment, composition, liquidation or dissolution of Republic or any action taken, election made, preference or claim for refund asserted or sustained in any proceeding with respect thereto; (iv) any lack of power or authority of Republic; (v) the taking or accepting by Hardie of any other security, collateral or guaranty or other assurance by Republic of performance; or (vi) any other action taken or omitted to be taken with respect to the covenants, agreements and obligations of hereunder, whether or not such action or omission prejudices Republic Parent or increases the likelihood that Republic Parent will have to perform the obligations of Republic.

REPUBLIC GROUP INCORPORATED

By:   /s/ Phil Simpson
    --------------------------------
      Phil Simpson, Chairman of the
      Board, President and Chief
      Executive Officer

EXHIBIT A

RECYCLED GYPSUM GRADE PAPERBOARD REQUIREMENTS

The volume of recycled gypsum-grade paperboard to be purchased by Hardie and to be supplied by Republic is as follows:

(i) 7% of the recycled gypsum-grade paperboard requirements of the gypsum wallboard plant located near Nashville, Arkansas that is currently owned by Hardie until December 31, 2000;

(ii) 95% (plus or minus 5%) of the recycled gypsum-grade paperboard requirements of the gypsum wallboard plant located near Nashville, Arkansas that is currently owned by Hardie beginning on January 1, 2001; and

(iii) 95% (plus or minus 5%) of the recycled gypsum-grade paperboard requirements of the gypsum wallboard plants located at or near Las Vegas, Nevada and Seattle, Washington that are currently owned by Hardie beginning on October 1, 2000.

Prior to the Commencement Notice, Republic and Hardie contemplate that test quantities of the Products produced at the Project Gazelle Mill will be furnished by Republic and purchased by Hardie and manufactured into gypsum wallboard. In addition, prior to the Commercial Production Date, Hardie may purchase and, if requested, Republic will supply, Shaftwall Liner Green and Veneer Plaster Base pursuant to subparagraph (i) above from its mills other than the Project Gazelle Mill, provided that, with respect to such Products sold prior to the Commercial Production Date, the porosity Specification shall be determined by mutual agreement between the Vice Presidents, Operations, of Hardie and Republic.

***

If during the term of this Agreement Hardie shall desire to expand the gypsum wallboard capacity of any of its Nashville, Arkansas, Las Vegas, Nevada or Seattle, Washington gypsum wallboard plants, Hardie shall promptly notify Republic in writing of such desire to expand capacity. Republic shall supply and Hardie shall purchase the recycled gypsum-grade paperboard requirements of such expanded capacity at the Nashville, Arkansas, Las Vegas, Nevada or Seattle, Washington gypsum wallboard plants on the same terms and conditions that are specified in this Paperboard Supply Agreement.

Notwithstanding the foregoing paragraphs on this Exhibit A, the parties anticipate that the output of the Project Gazelle Mill will be ramping up during approximately the first twelve months of Commercial Production. During such ramp-up period, the obligations of Hardie to purchase its requirements and Republic to sell such amounts will be adjusted proportionally to the mutual satisfaction of both parties, to accommodate an orderly transition of supply.

During the term of this Agreement, wallboard production technology may change so as to make it substantially more economical to utilize paper of a kind that is not presently commercially available and that Republic does not contemplate producing at the Project Gazelle Mill. In such a case, Republic agrees that it will use commercially reasonable efforts to develop the production capacity at the Project Gazelle Mill for such paper, and Hardie and Republic will negotiate in good faith to include such paper within the ambit of this Agreement to be sold pursuant to pricing mechanism similar to this Agreement. During such development phase, or if Republic is unwilling or unable to produce such paper at the Project Gazelle Mill, or if the parties cannot reach agreement regarding such paper after negotiating in good faith, commencing on October 1, 2004 and during the remainder of the term of this Agreement, Hardie may purchase such paper from other suppliers, and Hardie's demand for such paper will not be considered part of Hardie's recycled gypsum-grade paperboard requirements for purposes of this Agreement.

GRADE                      $/MSF
-----                      -----
Cream Face                 $ ***

Gray Back                    ***

Green-Lined                  ***

Brown Sheathing              ***

Shaftwall Liner Green        ***

Veneer Plaster Base          ***

EXHIBIT C

All specifications on this Exhibit C refer to the test value to be obtained at the Paperboard Mill at the time of manufacture. For purposes of this Exhibit C, "NS" shall be defined to mean none specified.

                                           MIN.      AVE.          MAX.
                                           ----      ----          ----
BASIS WEIGHT: (#/MSF)                      ***       ***           ***

MOISTURE CONTENT (%):                      ***       ***           ***

CALIPER: (INCHES)                          ***       ***           ***

POROSITY: ( SECONDS)                       ***       ***           ***

WATER ABSORPTION: (COBB)


TOP LINER: (GRAMS)                         ***       ***           ***

(CURED) BOND LINER: (GRAMS)                ***       ***           ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):                ***       ***           ***

ACROSS MACHINE DIRECTION (#/INCH):         ***       ***           ***

SATURATION: ( SECONDS)                     ***       ***           ***

WIDTH: (INCHES)

     a.                                    ***       ***           ***
     b.                                    ***       ***           ***
     c.                                    ***       ***           ***

DIAMETER: (INCHES)                         ***       ***           ***

BRIGHTNESS (% REFLECTANCE @457 NM):        ***       ***(desired)  ***
MULLEN PLY-BOND (PSI):                     ***       ***           ***

SHEFFIELD SMOOTHNESS (SHEFFIELD UNITS):    ***       ***(desired)  ***

APPEARANCE:    ***


CONVERSION
PROPERTIES:    ***

                                        MIN.       AVE.       MAX.
                                        ----       ----       ----
BASIS WEIGHT: (#/MSF)                   ***        ***        ***

MOISTURE CONTENT (%):                   ***        ***        ***

CALIPER: (INCHES)                       ***        ***        ***

POROSITY: ( SECONDS)                    ***        ***        ***

WATER ABSORPTION: (COBB)

TOP LINER: (GRAMS)                      ***        ***        ***

(CURED) BOND LINER: (GRAMS)             ***        ***        ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):             ***        ***        ***

ACROSS MACHINE DIRECTION (#/INCH):      ***        ***        ***

SATURATION: ( SECONDS)                  ***        ***        ***

WIDTH: (INCHES)

    a.                                  ***
    b.                                  ***
    c.                                  ***

DIAMETER: (INCHES)                      ***        ***        ***

MULLEN PLY-BOND (PSI):                  ***        ***        ***

APPEARANCE:    ***

CONVERSION
PROPERTIES:    ***

                                        MIN.       AVE.       MAX.
                                        ----       ----       ----
BASIS WEIGHT: (#/MSF)                   ***        ***        ***

MOISTURE CONTENT (%):                   ***        ***        ***

CALIPER: (INCHES)                       ***        ***        ***

POROSITY: ( SECONDS)                    ***        ***        ***

WATER ABSORPTION: (COBB)

TOP LINER: (GRAMS)                      ***        ***        ***

(CURED) BOND LINER: (GRAMS)             ***        ***        ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):             ***        ***        ***

ACROSS MACHINE DIRECTION (#/INCH):      ***        ***        ***

SATURATION: ( SECONDS)                  ***        ***        ***

WIDTH: (INCHES)                         ***        ***        ***

    a.                                  ***        ***        ***

DIAMETER: (INCHES)                      ***        ***        ***

MULLEN PLY-BOND (PSI):                  ***        ***        ***

SHEFFIELD SMOOTHNESS (SHEFFIELD UNITS): ***        ***        ***

APPEARANCE:        ***

CONVERSION
PROPERTIES:        ***

                                        MIN.       AVE.       MAX.
                                        ----       ----       ----
BASIS WEIGHT: (#/MSF)                   ***        ***        ***

MOISTURE CONTENT (%):                   ***        ***        ***

CALIPER: (INCHES)                       ***        ***        ***

POROSITY: ( SECONDS)                    ***        ***        ***

WATER ABSORPTION: (COBB)

TOP LINER: (GRAMS)                      ***        ***        ***

(CURED) BOND LINER: (GRAMS)             ***        ***        ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):             ***        ***        ***

ACROSS MACHINE DIRECTION (#/INCH):      ***        ***        ***

SATURATION: ( SECONDS)                  ***        ***        ***

WIDTH: (INCHES)
    a.                                  ***        ***        ***
    b.                                  ***        ***        ***
    c.                                  ***        ***        ***
    d                                   ***        ***        ***

DIAMETER: (INCHES)                      ***        ***        ***

MULLEN PLY-BOND (PSI):                  ***        ***        ***

APPEARANCE:        ***

CONVERSION
PROPERTIES:        ***

                                        MIN.       AVE.       MAX.
                                        ----       ----       ----
BASIS WEIGHT: (#/MSF)                   ***        ***        ***

MOISTURE CONTENT (%):                   ***        ***        ***

CALIPER: (INCHES)                       ***        ***        ***

POROSITY: ( SECONDS)                    ***        ***        ***

WATER ABSORPTION: (COBB)

TOP LINER: (GRAMS)                      ***        ***        ***

(CURED) BOND LINER: (GRAMS)             ***        ***        ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):             ***        ***        ***

ACROSS MACHINE DIRECTION (#/INCH):      ***        ***        ***

SATURATION: ( SECONDS)                  ***        ***        ***

WIDTH: (INCHES)                         ***        ***        ***

    a.                                  ***        ***        ***
    b.                                  ***        ***        ***

DIAMETER: (INCHES)                      ***        ***        ***

MULLEN PLY-BOND (PSI):                  ***        ***        ***

SHEFFIELD SMOOTHNESS (SHEFFIELD UNITS): ***        ***        ***

APPEARANCE:       ***

CONVERSION
PROPERTIES:       ***

                                        MIN.       AVE.       MAX.
                                        ----       ----       ----
BASIS WEIGHT: (#/MSF)                   ***        ***        ***

MOISTURE CONTENT (%):                   ***        ***        ***

CALIPER: (INCHES)                       ***        ***        ***

POROSITY: ( SECONDS)                    ***        ***        ***

WATER ABSORPTION: (COBB)

TOP LINER: (GRAMS)                      ***        ***        ***

(CURED) BOND LINER: (GRAMS)             ***        ***        ***

TENSILE STRENGTH:

MACHINE DIRECTION (#/INCH):             ***        ***        ***

ACROSS MACHINE DIRECTION (#/INCH):      ***        ***        ***

SATURATION: ( SECONDS)                  ***        ***        ***

WIDTH: (INCHES)

    a.                                  ***        ***        ***

DIAMETER:                               ***        ***        ***

MULLEN PLY-BOND (PSI):                  ***        ***        ***

APPEARANCE:     ***

CONVERSION
PROPERTIES:     ***

EXHIBIT D

HARDIE'S REQUIRED FORM OF PURCHASE ORDER

[LOGO OF JAMES HARDLE                                            PURCHASE ORDER
    APPEARS HERE]                                                 DATE
                                                          PAGE



SUPPLIER:                    DELIVER TO:                  INVOICE TO:
---------------------        ---------------------        ---------------------


Phone                        Phone                        Phone
Fax                          Fax                          Fax
---------------------        ---------------------        ---------------------

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   CONTACT NAME           BUYER                   PREFERRED CARRIER             SHIPPING TERMS                  CREDIT TERMS

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ITEM       QUANTITY           QTY            PART DESCRIPTION              UNIT        PER       REQUIRED          EXTENDED PRICE
CODE                          U/M                                          PRICE                   DATE            (EXCLUDING TAX)
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                                                                                                 TOTAL LINE VALUE
             MARK OUR ORDER NO. ON INVOICE AND ALL CORRESPONDENCE                                       SALES TAX
                                                                                                          FREIGHT
                                                                                                      GRAND TOTAL

EXHIBIT E

REPUBLIC'S REQUIRED FORM OF ACKNOWLEDGMENT

             ORDER DATE                         REPUBLIC ORDER
                                            MANUFACTURING FACILITY:

[LOGO OF REPUBLIC GYPSUM COMPANY
        APPEARS HERE]

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CUSTOMER NO      TERMS:       F.O.B.       FREIGHT        CUSTOMER P.O.#      SALES TERRITORY       CPA # OR FORMULA   REQUIRED
DATE


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