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                                                                   EXHIBIT 10.21


                              PARTNERSHIP AGREEMENT
                                       OF
                              STANDARD GYPSUM L.P.


         THIS PARTNERSHIP AGREEMENT is by and between TEMPLE-INLAND FOREST
PRODUCTS CORPORATION ("T-I"), GYPSUM MGC, INC. ("Gypsum" and referred to jointly
with T-I as the "General Partners"), MCQUEENEY GYPSUM COMPANY, LLC ("MGC"), and
TEMPLE GYPSUM COMPANY ("Temple" and referred to jointly with the other parties
in their roles as limited partners as the "Limited Partners" and with the
Limited Partners and the General Partners being referred to jointly as the
"Partners") and governs the operation and management of the Delaware limited
partnership named above (the "Partnership");

                              W I T N E S S E T H:

         WHEREAS, the Partners are members in Standard Gypsum L.L.C., a Texas
limited liability company organized as of March 15, 1996 (the "Company");

         WHEREAS, the Partners desire to convert the Company into a limited
partnership in accordance with the Delaware Revised Uniform Limited Partnership
Act, 6 Del. C.ss.17-101 et. seq. (the "Act");

         NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and intending to be legally bound hereby, the Partners hereby
agree to operate the Partnership under the following terms and conditions:

                                   ARTICLE I


                                     GENERAL

         1.1 Formation of Partnership. The Partners hereby organize the
Partnership in accordance with and pursuant to the Act, which Act, as amended
from time to time, shall govern the rights and liabilities of the Partners
except as otherwise expressly stated in this Partnership Agreement or in the
certificate of partnership of the Partnership.

         1.2 Purpose and Scope of Partnership.

         (a) The purpose of the Partnership shall be to manufacture and sell
gypsum wallboard and related products, and to mine and sell gypsum and related
products, and to engage in any activity that may be lawfully engaged in by a
limited partnership.

         (b) Nothing contained in this Partnership Agreement shall be deemed in
any way or manner to prohibit or restrict the right of any Partner or its
affiliates to conduct any business or activity whatsoever, even if such business
or activity competes with the Partnership or the business of any other Partner,
and there shall be no such restrictions on any Partner except those set forth in
the Agreement to Form LLC between T-I and McQueeney Gypsum Company dated as of
April 1, 1996.



<PAGE>

         1.3 Principal Office. The principal office of the Partnership shall be
maintained at offices located at 3401 FM78, McQueeney, Texas 78123, or at such
other place as may be designated by the Partners.

         1.4 Registered Agent and Office. The registered agent and office of the
Partnership in Delaware shall be as provided in the certificate of partnership
or as the Partnership may designate from time to time.

         1.5 Term. The period of duration of the Partnership is perpetual,
unless terminated earlier in accordance with the provisions hereof.

                                  ARTICLE II .

         2.1 [RESERVED]

                                 ARTICLE III .


                              CAPITAL CONTRIBUTIONS

         3.1 [RESERVED]

         3.2 Additional Capital Contributions.

         (a) The Partners agree to make additional capital contributions to the
Partnership in amounts determined by the Partners to be necessary to enable the
Partnership to pay its then existing obligations incurred under approved budgets
in accordance with good business practices as such become due and payable.
Contributions shall be made in proportion to the Partners' respective
Profit-Sharing Percentages.

         (b) The Partners may from time to time require all Partners to
contribute additional capital to the Partnership pro rata, in proportion to
their respective Profit-Sharing Percentages.

         (c) No Partner shall make any voluntary additional capital
contributions to the Partnership without authorization by the Partners.

         3.3 Liability of Partners. No Limited Partner shall be liable for the
debts, liabilities, contracts or any other obligations of the Partnership. A
Limited Partner shall be liable only to make its capital contribution and shall
not be required to lend any funds to the Partnership or, to make any further
capital contributions to the Partnership or to repay to the Partnership, any
Partner, or any creditor of the Partnership any portion of any negative balance
in its capital account.


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<PAGE>

                                   ARTICLE IV


                      ACCOUNTING; BANKING; CAPITAL ACCOUNTS

         4.1 Books and Records. The Partnership shall maintain full and accurate
books of account in accordance with Generally Accepted Accounting Principles on
an accrual basis (if accrual basis accounting is permitted by federal income tax
law), which shall be kept at the Partnership's principal office or at such other
location as the General Partners shall determine. Each Partner shall cause to be
entered into such books all transactions of or relating to the Partnership or
its business. Each Partner shall have access to such books and all other
Partnership records during reasonable business hours. The books shall be closed
and balanced monthly and as of the close of the Partnership's fiscal year and at
such other times as may be deemed appropriate.

         4.2 Income Tax Returns and Elections.

         (a) The Partnership shall provide the Partners information on the
Partnership's taxable income or loss that is relevant to reporting the
Partnership's income as well as all other filings, forms, or other information
required by federal or state taxing and regulatory authorities. This information
shall also show each Partner's distributive share of each class of income, gain,
loss or deduction. This information shall be furnished to the Partners as soon
as possible after the close of the Partnership's taxable year. All elections
required or permitted to be made by the Partnership under the Internal Revenue
Code of 1986 (the "Code") shall be made by the General Partners.

         (b) The Partnership shall instruct the Partnership's accountants or
other agents to prepare all required income tax returns for the Partnership and
all federal tax Form K-1's to be delivered to the Partners. Such return shall be
provided to the Partners at least thirty (30) days prior to the date such
returns are due to be filed, including extensions. If no written objection is
raised by the Partners within fifteen (15) days after receipt of a copy of the
returns, the Partnership shall file (or instruct the Partnership's accountants
to file) such returns in a timely manner. If written objection is raised by a
Partner, the Partners shall attempt to resolve any differences as to such
returns before the filing deadlines for the returns. If the Partners cannot
agree, the Management Committee shall prepare (or cause the Partnership's
accountants to prepare) the final returns as it deems appropriate and file (or
cause the Partnership's accountants to file) such returns, and either Partner
may proceed with arbitration under Section 9.3 to determine if amended returns
should be prepared and filed.

         4.3 Fiscal Year. The fiscal year of the Partnership shall be a 52-53
week year ending on the closest Saturday to December 31.

         4.4 Banking. All funds of the Partnership shall be deposited in bank
accounts as designated from time to time by the Partnership. Withdrawals from
such accounts may be made upon the signature of individuals, or otherwise, as
authorized by the Partners to make withdrawals.

         4.5 Loans from Partners. The amount of a loan, if any, made to the
Partnership by a Partner shall not be considered a contribution to capital of
the Partnership nor shall the making of


                                       3
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such loan entitle such Partner to an increased share of the profits or losses to
be made pursuant to the provisions of this Partnership Agreement. All such loans
shall be documented by a promissory note of the Partnership and shall bear
interest at the rate, and be subject to the other terms, agreed to by the
lending Partner and the Partners.

         4.6 Maintenance of Capital Accounts.

         (a) An individual capital account shall be established and maintained
for each Partner. Unless otherwise specifically provided herein, all references
to "capital accounts" shall be references to "book" capital accounts and not
"tax" capital accounts. Book and tax capital accounts shall be maintained in
accordance with Treasury Regulation ss. 1.704-1(b), as those regulations may be
amended from time to time.

         (b) Each Partner's capital account shall be increased (credited) by (A)
the amount of money and the fair market value of property contributed as such
Partner's capital contribution to the Partnership (net of any liabilities to
which the contributed property is subject), and (B) all items of income and gain
(including income and gain, if any, exempt from tax) allocated to such Partner;
and shall be decreased (debited) by (C) the amount of money and the fair market
value of property distributed to such Partner (net of any liabilities assumed by
such Partner and liabilities to which such distributed property is subject, and
after adjusting the Partners' capital accounts by the Partners' shares of the
unrealized income, gain, loss and deduction inherent in such property and not
reflected in such capital accounts previously, as if the property had been sold
for its then fair market value), (D) all items of deduction and loss allocated
to such Partner, and (E) allocation to such Partner of expenditures of the
Partnership described in Section 705(a)(2)(B) of the Internal Revenue Code (the
"Code").

         (c) If the contributed property is reflected on the books of the
Partnership at a book value that differs from the adjusted tax basis of the
property, then the capital accounts will be adjusted for allocations of income,
gain, deduction and loss with respect to such property as computed for book
purposes and the Partner's distributive shares of the corresponding tax items
will not be independently reflected in such capital accounts, all as set forth
in Treasury Regulations Section 1.704-1(b)(2)(iv)(g). In determining each
Partner's distributive share of the taxable income or loss of the Partnership
for federal tax purposes, income, gain, loss or deduction with respect to the
contributed property shall be allocated to each Partner in such a manner as will
take into account (as required by Section 704(c) of the Code and any applicable
Treasury Regulations thereunder) the difference between the adjusted basis for
federal income tax purposes of such property to the Partnership and the agreed
fair market value of such property at the time of its contribution.

         (d) No Partner shall be entitled to withdraw any part of its capital
contribution or its capital account or to receive any distribution from the
Partnership, except as expressly provided herein. No interest shall be paid by
the Partnership on capital contributions or on balances in the Partners' capital
accounts.


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<PAGE>

                                  ARTICLE V .


            ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTION OF INCOME

         5.1 Allocation of Profits and Losses. For capital account and tax
purposes, except where otherwise expressly provided herein, profits, gains,
losses, credits and other items realized or recognized by the Partnership shall
be divided among the Partners in accordance with the following percentages (the
"Profit-Sharing Percentages"):

<TABLE>
<CAPTION>
         Partner           Interest Type         Profit-Sharing Percentage
         -------           -------------         -------------------------
         <S>              <C>                    <C>
         T-I              General Partner                    1%
         Gypsum           General Partner                    1%
         Temple           Limited Partner                   49%
         MGC              Limited Partner                   49%
</TABLE>

         5.2 Special Allocations. The following special allocations shall be
made in the following order and priority:

         (a) Minimum Gain Charge-Back. Notwithstanding any other provision of
this Article V, if there is a net decrease in Partnership minimum gain during
any fiscal year or other period, prior to any other allocation pursuant hereto,
each Partner shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount and manner
required by Treasury Regulation ss. 1.704-2(f) or 1.704-2(i). The items to be so
allocated shall be determined in accordance with Treasury Regulation ss.
1.704-2.

         (b) Qualified Income Offset. Any Partner who unexpectedly receives an
adjustment, allocation or distribution described in Treasury Regulation ss.
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes or increases a negative balance
in its capital account (in excess of any amount that Partner is obligated to
restore) shall be allocated items of income and gain sufficient to eliminate
such increase or negative balance caused thereby, as quickly as possible, to the
extent required by such Treasury Regulation.

         (c) Gross Income Allocation. In the event any Partner has a deficit
capital account at the end of any Partnership fiscal year which is in excess of
the sum of (i) the amount such Partner is obligated to restore pursuant to any
provision of this Partnership Agreement and (ii) the amount such Partner is
deemed to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulation ss.ss. 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner
shall be specially allocated items of Partnership income and gain in the amount
of such excess as quickly as possible, provided that an allocation pursuant to
this Section 5.2(c) shall be made only if and to the extent that such Partner
would have a deficit capital account in excess of such sum after all other
allocations provided for in this Article V have been made as if this Section
5.2(c) were not in this Partnership Agreement.

         (d) Section 704(b) Limitation. Notwithstanding any other provision of
this Partnership Agreement to the contrary, no allocation of any item of income
or loss shall be made to a Partner if such allocation would not have "economic
effect" pursuant to Treasury Regulation ss. 1.704-1(b)(2)(ii) or otherwise be in
accordance with its interest in the Partnership within the


                                       5
<PAGE>

meaning of Treasury Regulation ss.ss. 1.704-1(b)(3) and 1.704-2(a). To the
extent an allocation cannot be made to a Partner due to the application of this
Section 5.2(d), such allocation shall be made to the other Partner(s) entitled
to receive such allocation hereunder.

         (e) Curative Allocations. Any allocations of items of income, gain, or
loss pursuant to Sections 5.2(a)-(d) hereof shall be taken into account in
computing subsequent allocations pursuant to this Article V, so that the net
amount of any items so allocated and the income, losses, and other items
allocated to each Partner pursuant to this Article V shall, to the extent
possible, be equal to the net amount that would have been allocated to each
Partner had no allocations ever been made pursuant to Sections 5.2(a)-(d).

         (f) Tax Allocations; Code Section 704(c). In accordance with Code
Section 704(c) and the Treasury Regulations thereunder, income, gain, loss, and
deduction with respect to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated among the Partners so
as to take account of any variation between the adjusted basis of such property
to the Partnership for federal income tax purposes and its fair market value at
the time of its contribution. Allocations pursuant to this Section 5.2(f) are
solely for purposes of federal, state, and local taxes and shall not affect, or
in any way be taken into account in computing, any Partner's capital account or
share of income, losses, other items, or distributions pursuant to any provision
of this Partnership Agreement.

         5.3 Distribution of Cash Flow. Subject to Section 6.3 below, all "net
free cash flow" (as defined below) of the Partnership shall be distributed to
the Partners in accordance with their Profit-Sharing Percentages at times
determined by the Management Committee.

         5.4 Net Free Cash Flow Defined. For purposes of this Partnership
Agreement, the term "net free cash flow" shall mean the net income of the
Partnership as determined in accordance with Generally Accepted Accounting
Principles, consistently applied, except that (a) depreciation of buildings,
improvements, personalty and all other depreciated items and amortization of
leasehold improvements and all other amortized items shall not be considered a
deduction, (b) mortgage amortization and loan payments shall be considered a
deduction, (c) any amounts expended by the Partnership for capital items shall
be considered a deduction, (d) if the Partners deem it necessary or advisable, a
reasonable reserve shall be deducted for working capital needs, to provide funds
for improvements or for any contingencies of the Partnership, and (e) all other
actual expenditures of the Partnership (except for distributions to Partners
pursuant to this Article V) shall be considered deductions. Net proceeds from
refinancing or sale, excess insurance and any condemnation award of all or any
portion of real property owned by the Partnership and additional capital
contributions by Partners shall be deemed profits for purposes of determining
net free cash flow.

                                  ARTICLE VI .


                          POWERS AND DUTIES OF PARTNERS

         6.1 Management Generally; Status of Limited Partners. The management,
control and operation of the Partnership is vested exclusively in the General
Partners. The Limited Partners have no part in the management, control or
operation of the Partnership and have no


                                       6
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authority or right to act on behalf of the Partnership in connection with any
matter. The Limited Partners have no voting rights with respect to any
Partnership matters, other than the right to vote on amendments to this
Agreement pursuant to SECTION 9.8 and on other matters specifically set forth in
this Agreement. No Limited Partner shall have any personal liability whatever,
whether to the Partnership or any other party, for the debts of the Partnership
or any of its losses except to the extent of its rights and interests in and to
the Partnership and its assets.

         6.2 Control and Management. The management, control and operation of
the Partnership is vested exclusively in the General Partners. The General
Partners shall meet and express their decisions through a Management Committee.
Each General Partner shall designate two of its employees (or employees of its
affiliates) as the representatives of such General Partner on the Management
Committee and to act on its behalf in making decisions regarding the management
of the Partnership. The representatives of a General Partner on the Management
Committee shall have one collective vote equal to the Profit-Sharing Percentage
of such General Partner and its affiliates. All decisions concerning the
management of the Partnership that are made by the Management Committee shall be
the act of the Partnership.

         6.3 Meetings. Meetings of the Management Committee shall be held on
five (5) days' notice or on such shorter notice as may be mutually agreeable to
the General Partners. Notice of the time and place of each meeting shall be
given to each General Partner in writing by the General Partner or General
Partners calling the meeting.

         6.4 Quorum. The Management Committee may take action on a matter at a
meeting only if each of the General Partners (a "Quorum") is present by their
representatives or by proxy. Once a General Partner is represented for any
purpose at a meeting, such General Partner is deemed present for Quorum purposes
for the remainder of the meeting and for any adjournment of that meeting unless
a new record date is or must be set for that adjourned meeting. In the absence
of a Quorum at the opening of any meeting of the Management Committee, such
meeting may be adjourned from time to time by the vote of the majority of the
members present.

         6.5 Proxies. Subject to express notice by a General Partner to the
contrary, any one representative of a General Partner at a meeting of the
Management Committee, in the absence of the other representative of such General
Partner, shall have the authority to vote on behalf of such General Partner.
General Partners also may vote by one or more other proxies authorized by a
written appointment of proxy signed by the General Partner or by a General
Partner's duly authorized attorney-in-fact and delivered to the Partnership for
inclusion in the minutes or filing with the Partnership's records.

         6.6 Action by Partners. Except as otherwise provided herein, if a
Quorum exists, action on a matter is approved if General Partners holding a
majority of the Profit-sharing Percentages, either directly or indirectly
through one of its affiliates, vote in favor of the action at a meeting of the
Management Committee. As used in this Partnership Agreement, the phrase "the
approval of the Partners," "the consent of the Partners" and similar phrases
shall mean the approval as set forth in the foregoing sentence except as
expressly provided otherwise in this Partnership Agreement.


                                       7
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         6.7 Unanimous Written Consent. Any action that is required or permitted
to be taken by the Partners may be taken without a meeting if one or more
written consents, describing the action so taken, shall be signed by all of the
General Partners' Management Committee representatives and delivered to the
Partnership for inclusion in the minutes or filing with the Partnership's
records.

         6.8 Officers. Subject to the provisions of this Partnership Agreement,
the General Partners may delegate the management of the operation of the
business of the Partnership to agents of the Partnership as hereinafter
described (the "Officers"), and the General Partners hereby consent to the
exercise by the Officers of the powers conferred by this Partnership Agreement
and to the employment, when and if the same is deemed necessary or advisable, of
such brokers, agents, accountants, attorneys and other advisors as the Officers
may determine to be appropriate for the management of the Partnership.

         6.9 Titles and Duties of Officers.

         (a) The Officers of the Partnership shall consist of a President, a
Secretary, a Treasurer and such Vice-Presidents, Assistant Secretaries,
Assistant Treasurers and other Officers as the Management Committee may from
time to time appoint. Any two or more offices may be held by the same person,
but no Officer may act in more than one capacity where action of two or more
Officers is required.

         (b) The Officers of the Partnership shall be appointed by the
Management Committee, and each Officer shall hold office until his death,
resignation, retirement, removal, termination date under a contract of
employment, disqualification or his successor shall have been appointed.

         (c) The compensation of all Officers of the Partnership shall be fixed
by the Management Committee and no Officer shall serve the Partnership in any
other capacity and receive compensation therefor unless such additional
compensation be authorized by the Management Committee.

         (d) Any Officer or agent appointed by the Management Committee may be
removed by the Management Committee whenever in its judgment the best interests
of the Partnership will be served thereby; but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.

         (e) The Management Committee may by resolution require any Officer,
agent or employee of the Partnership to give bond to the Partnership, with
sufficient sureties, conditioned on the faithful performance of the duties of
his respective office or position, and to comply with such other conditions as
may from time to time be required by the Management Committee.

         (f) The President shall be the principal executive Officer of the
Partnership and, subject to the control of the Management Committee, shall in
general supervise and control all of the business and affairs of the
Partnership. He shall sign, with the Secretary, an Assistant Secretary or any
other proper Officer of the Partnership thereunto authorized by the Management
Committee, any deeds, mortgages, bonds, contracts or other instruments which the
Management Committee has authorized to be executed, except in cases where the
signing and execution


                                       8
<PAGE>

thereof shall be expressly delegated by the Management Committee or by this
Partnership Agreement to some other Officer or agent of the Partnership, or
shall be required by law to be otherwise signed or executed; and in general he
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Management Committee from time to time.

         (g) In the absence of the President or in the event of his death,
inability or refusal to act, the Vice-Presidents in the order of their length of
service as Vice-Presidents, unless otherwise determined by the Management
Committee, shall perform the duties of the President, and when so acting shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice-President shall perform such other duties as from time to
time may be assigned to him by the President or Management Committee.

         (h) The Secretary shall: (a) maintain any records of the meetings of
Partners of the Management Committee in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of this Partnership Agreement or as required by law; (c) be custodian
of the Partnership records; (d) keep a register of the post office address of
each Partner which shall be furnished to the Secretary by such Partner; (e) keep
or cause to be kept at the Partnership's registered office or principal place of
business a record of the Partners, giving the names and addresses of all
Partners and the Profit-Sharing Percentage held by each; and (f) in general
perform all duties incident to the office of Secretary and such other duties as
from time to time may be assigned to him by the President or by the Management
Committee.

         (i) In the absence of the Secretary of in the event of his death,
inability or refusal to act, the Assistant Secretaries in the order of their
length of service as Assistant Secretary, unless otherwise determined by the
Management Committee, shall perform the duties of the Secretary, and when so
acting shall have all the powers of and be subject to all the restrictions upon
the Secretary. They shall perform such other duties as may be assigned to them
by the Secretary, by the President, or by the Management Committee.

         (j) The Treasurer shall: (a) have charge and custody of and be
responsible for all funds and securities of the Partnership, receive and give
receipts for moneys due and payable to the Partnership from any source
whatsoever, and deposit all such moneys in the name of the Partnership in such
depositories as shall be selected by the Management Committee; and (b) in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by the President or by
the Management Committee or by this Partnership Agreement.

         (k) In the absence of the Treasurer or in the event of his death,
inability or refusal to act, the Assistant Treasurers in the order of their
length of service as Assistant Treasurer, unless otherwise determined by the
Management Committee, shall perform the duties of the Treasurer, and when so
acting shall have all the powers and be subject to all the restrictions upon the
Treasurer. They shall perform such other duties as may be assigned to them by
the Treasurer, by the President, or by the Management Committee.

         6.10 Powers of Partners and Officers. No Officer or General Partner of
the Partnership shall have any right, power or authority to bind the Partnership
or otherwise act on behalf of the


                                       9
<PAGE>

Partnership unless such right, power or authority is set forth in this
Partnership Agreement or, except to the extent further limited by the provisions
of Section 6.10 hereof, unless pursuant to the consent of the Management
Committee. An Officer or General Partner, acting with the consent of the
Management Committee, shall have the authority to:

         (a) negotiate, enter into, and execute leases and contracts, and to
incur obligations for and on behalf of the Partnership in connection with the
business of the Partnership;

         (b) borrow money for and on behalf of the Partnership in connection
with the Partnership's business and to pledge the credit and property of the
Partnership for such purposes, including obtaining a line(s) of credit from a
bank or banks, and drawing upon such line of credit as is reasonably needed for
working capital to enable the Partnership to conduct its business and pay the
Partnership's bills as they become due;

         (c) execute on behalf of the Partnership any and all documents or
instruments that are appropriate in carrying out the purposes of the
Partnership; and

         (d) cause all things to be done on behalf of the Partnership
appropriate to accomplish the Partnership purposes.

         6.11 Major Decisions. Neither the Partnership nor any General Partner
or Officer thereof shall take or agree to take any of the following actions
without the consent of all of the Partners:

         (a) Admit any person as a Partner;

         (b) Take any action which would make impossible the ordinary conduct of
Partnership business, including selling, transferring or otherwise disposing of
all or substantially all of the Partnership's assets;

         (c) Take any action in contravention of this Partnership Agreement;

         (d) Confess a judgment against the Partnership;

         (e) File or consent to the filing of a petition for or against the
Partnership under any federal or state bankruptcy, insolvency or reorganization
act;

         (f) Make a non-pro rata distribution or return of capital to any
Partner, except as otherwise provided in this Partnership Agreement;

         (g) Amend this Partnership Agreement;

         (h) Change or reorganize the Partnership into any other legal form.

         (i) Make capital expenditures exceeding $10,000 in any one year; or

         (j) Merge the Partnership into or with any other entity.


                                       10
<PAGE>

         6.12 Conveyances. All third parties shall be protected and shall be
exonerated from any and all liability if they deal with the Partnership on the
basis of agreements or documents of conveyance approved and executed by agents
with authority from the Management Committee.

         6.13 Contracting in Partnership Name. Unless otherwise approved by the
Management Committee, all obligations incurred and contracts and other
relationships entered into for or on behalf of or for the benefit of the
Partnership shall be made or taken in the name of the Partnership or, if taken
in the name of one of the Partners, shall be assigned to the Partnership. In
furtherance of the foregoing, each Partner hereby agrees that any such
obligations, contracts or relationships are and will be held solely for the
benefit and on behalf of the Partnership, may be enforced directly by it, and
the same, whether now held or hereafter acquired, are, by these presents, hereby
assigned, transferred and set over to the Partnership. Further, each such
Partner agrees that it will from time to time and at all times do such other and
further acts and execute and deliver such further assignments and documents as
may be reasonably necessary to effect the assignment hereby made.

         6.14 Expenses. The Partnership shall reimburse each Partner for all
reasonable expenses, if any, incurred in connection with the organization,
management and operation of this Partnership. No Partner's employees or agents
shall receive a salary nor shall any Partner otherwise be compensated for its
services to the Partnership unless such compensation is approved by the
Management Committee.

         6.15 Indemnification. To the fullest extent permitted under the Act
from time to time in effect, the Partnership shall indemnify, out of the assets
of the Partnership, each member of the Management Committee and each Officer,
against any losses, claims, damages or liabilities (including legal or other
expenses reasonably incurred in investigating or defending against any such
loss, claim, damage or liability), joint or several, to which any of such
persons may become subject by reason of his being an Officer or a member of the
Management Committee (but only to the extent and with respect to services
performed by such Officer or member for or on behalf of the Partnership),
provided that he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Partnership and not involving
willful misconduct or gross negligence of the duties involved in the conduct of
his office, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

                                 ARTICLE VII .


        WITHDRAWAL OF PARTNERS; TRANSFERABILITY OF PARTNERSHIP INTERESTS

         7.1 General. It is the present intent of the Partners that they shall
not voluntarily withdraw as Partners and shall not transfer their Partnership
Interests (as defined in Section 7.2). The Partners recognize, however, that
certain events may occur which would give rise to a separation of interests of
the Partners. In order, therefore, to provide sufficient safeguards for each
Partner and to provide for continuity of the Partnership, the withdrawal or
transfer of an interest in the Partnership shall be governed as set forth in
this Article VII. Each Partner agrees


                                       11
<PAGE>

that neither it, its successors, nor assigns will sell, transfer or assign its
Partnership Interest without complying with the requirements of this Article
VII. Transfers in contravention of this Article VII shall be void ab initio.

         7.2 Voluntary Transfer of Membership Interest. Except as may be
expressly provided in this Partnership Agreement, a Partner may not sell,
transfer, assign, pledge or otherwise voluntarily dispose of or encumber (by
operation of law or otherwise) all or part its rights and interest as a Partner
of the Partnership (its "Partnership Interest") without the written consent of
the other Partner(s) in accordance with the terms and conditions set forth in
such consent. Any transfer of a Partnership Interest pursuant to Section 7.6
shall be deemed to be a voluntary transfer in compliance with this Section 7.2.
An appropriate amendment to this Partnership Agreement shall be executed with
respect to any transfer of a Partner's Partnership Interest or portion thereof.

         7.3 Involuntary Transfer or Withdrawal. The following events shall
constitute events of involuntary transfer (an "Involuntary Transfer") of a
Partner's Partnership Interest and shall result in the rights of election in the
remaining Partner(s) provided in Section 7.4 below:

         (a) The filing of a petition by a Partner for relief as a debtor or
bankrupt under the U.S. Bankruptcy Code or any similar federal or state law
affording debtor relief proceedings; the adjudication of insolvency of a Partner
as finally determined by a court proceeding or the filing by or on behalf of a
Partner to accomplish the same or for the appointment of a receiver, custodian,
assignee or trustee for the benefit of creditors of a Partner.

         (b) The commencement of any proceedings relating to a Partner by a
third party under the U.S. Bankruptcy Code or similar federal or state law or
other reorganization, arrangement, insolvency, adjustment of debt or liquidation
law; the allowance of a Partner's Partnership Interest (or portion thereof) to
become subject to attachment, garnishment, charging order, or similar charge
unless any such preceding enumerated event is susceptible to cure and is cured
within 90 days;

         (c) Failure of a Partner to make the advances or the capital
contributions which may be required under Section 3.2 of this Partnership
Agreement;

         (d) Caraustar Industries, Inc. no longer owns, directly or indirectly,
a controlling interest in MGC, or any agreement is entered into pursuant to
which that would occur;

         (e) Any purported voluntary transfer of a Partner's Partnership
Interest or the withdrawal of a Partner in violation of Section 7.2.

         7.4 Election Upon Involuntary Transfer. Upon the occurrence of any
event of Involuntary Transfer, the remaining Partners (holding a majority of
both the Profit-Sharing Percentages and capital account balances of the
remaining Partners) shall have the right (i) to purchase the entire interest of
the withdrawing Partner or to arrange such a purchase by the Partnership or a
third party or parties acceptable to the remaining Partners, at the purchase
price and upon such terms as may be agreed to by the parties, or in the absence
of agreement, such price and terms as may be determined as specified in Section
7.5 and thereafter, to continue the business of the Partnership, (ii) to allow
the withdrawing Partner or its representatives,


                                       12
<PAGE>

successors or assigns to continue to participate in the Partnership, but only
with the interest of an assignee as described in Section 7.7 herein, and to
continue the business of the Partnership, or (iii) to terminate the Partnership
by liquidation and distribution of Partnership assets as provided in Section 8.2
below. The remaining Partners must exercise such option by written notice to the
withdrawing Partner or the personal representative or the successor in interest
of the withdrawing Partner within thirty (30) days after the event of
Involuntary Withdrawal.

         7.5 Procedure for Purchase of a Partner's Interest. Any purchase of the
interest of a withdrawing Partner under Section 7.4 above shall be accomplished
as follows:

         (a) Purchase Price. The purchase price of a withdrawing Partner's
Partnership Interest (or any portion thereof) shall be as agreed upon by the
remaining Partners (or other purchasing party) electing to purchase and the
withdrawing Partner or its personal representative or successor in interest. If
a purchase price cannot be agreed upon, the purchase price shall be a sum equal
to the balance of the withdrawing Partner's capital account as of the date of
the event of withdrawal as shown on the records of the Partnership adjusted to
reflect the fair market value of all assets of the Partnership less Partnership
liabilities and the withdrawing Partner's share of the profits or losses of the
Partnership for the period from the beginning of the calendar year in which
withdrawal of such Partner occurs to the last day of the month in which the
event of withdrawal occurs, in each case reduced by the Partnership's costs of
effecting the withdrawal. The fair market value of the assets of the Partnership
shall be determined by appraisers as of the date of the event of involuntary
transfer within thirty (30) days of the event of involuntary transfer, one of
which shall be selected by the withdrawing Partner or his personal
representative or successor in interest, one of which shall be selected by the
remaining Partner electing to purchase (or other purchasing party), and the
other of which shall be selected by the two appraisers so selected.

         The decision of a majority of the appraisers shall be determinative. If
a majority of the appraisers do not agree, then the average of the values
determined by all three appraisers shall be fair market value for purposes of
this Section. The valuation as so determined shall be binding on the parties.
The costs of the appraisals shall be equally borne by the remaining Partner(s)
(or other purchasing party) electing to purchase and the withdrawing Partner.

         Any event of involuntary withdrawal under Section 7.3 shall result in
the right of any of the remaining Partners to purchase the interest of the
withdrawing Partner at the valuation determined above discounted by fifteen
percent (15%); provided, however, that such discount shall not be exclusive of
any other right or remedy available to any Partner or the Partnership under this
Partnership Agreement or applicable law against the withdrawing Partner.

         (b) Payment of Purchase Price. The purchase price determined above
shall be payable in the full amount thereof in cash at closing. Unless otherwise
agreed, closing shall occur at the principal address of the Partnership on a
date specified by the purchaser but in no event later than sixty (60) days after
the determination of the purchase price.

         The purchase price as determined and paid above shall be in full and
complete satisfaction of the withdrawing Partner's Partnership Interest (or
portion thereof purchased) and shall be binding upon the withdrawing Partner and
its respective successors and/or assigns.


                                       13
<PAGE>

         Coincident with the purchase of a withdrawing Partner's Partnership
Interest, the purchaser(s) shall purchase at face value any loans owed by the
Partnership to the withdrawing Partner. Coincident with the transfer of a
withdrawing Partner's Partnership Interest, the withdrawing Partner, or its
personal representative or other successor in interest shall execute and deliver
to the remaining Partner(s) electing to purchase (or other purchaser) all
instruments required to effectively transfer its entire interest (or portion
thereof which may be purchased) in the Partnership to the remaining Partner(s)
electing to purchase (or other purchaser) and shall pay or cause payment of any
outstanding loan owed by the withdrawing Partner to the Partnership.

         7.6 Buy-Sell Right.

         (a) At any time (i) after good faith efforts have failed to resolve a
deadlock on the Management Committee over a material matter affecting the
operation of the Partnership, or (ii) after April 1, 2001, each Partner (the
"Offeror") has the right, exercisable by written notice (the "Offer") to any of
the other Partners (the "Offeree"), to offer to buy the Offeree's interest in
the Partnership at a purchase price and upon the other terms specified in the
Offer.

         (b) The Offeree must elect by written notice (the "Notice of Election")
to the Offeror within 60 days after receipt of the Offer, either:

                  (i) to sell the Offeree's entire interest in the Partnership
         to the Offerer at the purchase price and on the other terms specified
         in the Offer, or

                  (ii) to purchase the Offeror's entire interest in the
         Partnership at the purchase price and on the other terms specified in
         the Offer.

         If the Offeree fails to make the Notice of Election within 60 days
after receipt of the Offer, the Offeree is deemed to have elected to sell the
Offeree's entire interest in the Partnership to the Offeror at the purchase
price and on the other terms specified in the Offer.

         (c) Within 30 days after receipt of the Notice of Election (or within
30 days after a deemed election if no Notice of Election is received), the
selling Partner shall execute such documents and instruments reasonably required
by the purchasing Partner to sell and transfer the selling Partner's entire
interest in the Partnership to the purchasing Partner at the purchase price and
on the other terms specified in the Offer, and the closing of such sale shall
take place as soon as practicable but in any event within 30 days thereafter. At
the closing, the purchasing Partner shall pay the consideration specified in the
Offer to the selling Partner in accordance with the terms of the Offer, and the
selling Partner shall sell and transfer its entire interest in the Partnership
to the purchasing Partner free and clear of all liens and encumbrances other
than liens and encumbrances arising out of Partnership financing.

         7.7 Rights of Assignors and Assignees. Any transfer of a Partnership
Interest to an existing Partner shall be effective to make the transferee
thereof a Partner without further action by any person. Any other sale,
assignment or transfer, whether voluntary or involuntary of any Partnership
interest shall be effective to give the assignee only the right to receive the
share of income, losses and distributions to which the assignor would otherwise
be entitled and shall not be effective to constitute the assignee as a Partner.
Any Partner that transfers all of its Partnership Interest voluntarily or
involuntarily shall be removed automatically as a Partner


                                       14
<PAGE>

without further action or approval by any person. An assignee who does not
become a Partner shall have no right to share in any management decisions, no
voting rights, no right to examine Partnership books and records, and no other
rights of any kind whatsoever except as described in the preceding sentence. Any
assignee of the interest of a Partner shall be admitted as a Partner of the
Partnership only after the following conditions are satisfied:

         (a) The remaining Partners holding a majority of the Profit-Sharing
Percentages exclusive of any interests of the assignor and assignee consent in
writing to the admission of the assignee as a Partner, which consent may be
granted or denied in the absolute discretion of such remaining Partner;

         (b) the duly executed and acknowledged written instrument of assignment
has been filed with the Partnership, setting forth the intention of the assignor
that the assignee become a Partner;

         (c) the assignee has consented in writing in a form satisfactory to the
remaining Partners holding a majority of the Profit-Sharing Percentages
exclusive of any interests of the assignor and assignee to be bound by all of
the terms of this Partnership Agreement in the place and stead of the assignor;
and

         (d) the assignor and assignee have executed and acknowledged such other
instruments as the remaining Partners holding a majority of the Profit-Sharing
Percentages exclusive of any interests of the assignor and assignee may deem
necessary or desirable to effect such admission.

         Any assignee of a Partnership Interest who does not become a Partner,
whether or not admitted as a Partner, shall be subject to all terms of this
Partnership Agreement. Without limiting the generality of the foregoing, any
such assignee who desires to make a further assignment of such Partnership
Interest shall be subject to all provisions of this Article VII to the same
extent and in the same manner as any Partner desiring to make an assignment of
its interest.

                                 ARTICLE VIII .


                 TERM, TERMINATION, DISSOLUTION AND LIQUIDATION

         8.1 Events of Dissolution. Except as expressly provided herein, no
Partner shall have the right to cause a dissolution of the Partnership. The
Partnership shall be dissolved upon the earlier of (a) the unanimous consent of
all Partners; (b) the sale by the Partnership of all or substantially all of its
assets, and the receipt by the Partnership of the purchase price in full
(provided, however, that the Partnership may continue for the purpose of
collecting the sales proceeds); (c) failure of the Partners to supply funds
necessary for the operation of the Partnership, either by capital contributions
or loans; (d) an event of Involuntary Transfer occurs with respect to a Partner
and the remaining Partners do not elect to continue the business of the
Partnership as provided in Section 7.4(a) or (b); or (e) the acquisition by a
Partner of 100 percent of the ownership interests in the Partnership.


                                       15
<PAGE>

         8.2 Winding Up the Partnership.

         (a) If an event of dissolution occurs, as described in Section 8.1
above, a reasonable time shall be allowed for the orderly liquidation of the
assets of the Partnership and the discharge of liabilities to creditors so as to
enable the Partners to minimize the normal losses attendant upon a liquidation.

         (b) The Partners shall continue to share profits, gains and losses
during the liquidation in the same manner as before dissolution. The proceeds
from liquidation of Partnership assets shall be applied as follows: (i) payment
to creditors of the Partnership in the order of priority provided by law, and
the establishment of reserves for any unforeseen or not yet due liabilities or
obligations; (ii) payment to the Partners of their respective capital account
balances; and (iii) remaining amounts, if any, to the Partners in accordance
with their respective Profit-Sharing Percentages.

                                  ARTICLE IX .


                                  MISCELLANEOUS

         9.1 Notices. All notices or requests provided for or permitted to be
given pursuant to these Regulation shall be in writing and shall be deemed given
if hand delivered or if deposited in the United States mail, addressed to the
party to be notified, postage paid and registered or certified, return receipt
requested. All notices to be given to the Partners shall be sent to or made at
the following addresses:


        Partner                                Address
        -------                                -------

Temple-Inland Forest               303 South Temple Drive
Products Corporation               Post Office Drawer N
                                   Diboll, Texas 75941
                                   Attn:  Vice-President - Panel Products

with copies to                     Temple-Inland Forrest Products Corporation
                                   P.O. Box 777
                                   Diboll, Texas 75941
                                   Attn: General Counsel

Gypsum MGC, Inc.                   3401 FM78
                                   Post Office Box 579
                                   McQueeney, Texas 78123



                                       16
<PAGE>

With copies to:                    Caraustar Industries, Inc.
                                   Post Office Box 115
                                   3100 Washington Street
                                   Austell, Georgia 30001
                                   Attn: Chief Financial Officer


or at such other address as shall be designated by the respective Partners.

         9.2 Remedies. Each of the Partners hereby acknowledges that a default
under this Partnership Agreement will cause irreparable harm and damage to the
Partnership and the other Partners. Therefore, each of the Partners hereby
agrees that in the event of a breach or default hereunder by any Partner, the
other Partners, or any one of them, may seek specific performance of the
obligations of the respective Partners hereunder, and no other Partner shall
oppose such attempt to obtain specific performance on the ground that there
exists adequate remedy at law for any such breach or default. The remedies
referred to in this paragraph shall be non-exclusive, cumulative and in addition
to all other remedies of the parties hereto.

         9.3 Arbitration of Disputes. All claims or disputes arising between the
Partners relating to this Partnership Agreement or the breach thereof shall be
decided by arbitration in the City of Houston, Texas in accordance with the
Rules of the American Arbitration Association then obtaining, unless the
Partners mutually agree otherwise. Notice of the demand for arbitration shall be
filed in writing by any Partner with the other Partners and with the American
Arbitration Association, and shall be made within a reasonable time after the
dispute has arisen. The award rendered by the arbitrator(s) respecting claims
under this Partnership Agreement of any breach thereof shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof. The provisions of this Partnership Agreement
concerning arbitration and any other written agreement to arbitrate referred to
herein shall be specifically enforceable under the prevailing arbitration law.

         9.4 Governing Law. This Partnership Agreement and the obligations of
the Partners hereunder shall be construed in accordance with the laws of the
State of Delaware.

         9.5 Waiver. No consent or waiver, express or implied, by any Partner to
or of any breach or default by any other Partner in the performance of his
obligations hereunder shall be deemed or construed to be a consent to or waiver
of any other breach or default in the performance of such other Partner of the
same or any other obligations hereunder. Failure on the part of a Partner to
complain of any act or failure to act of any other Partner or to declare any
other Partner in default, without regard to the period of time such failure
shall continue, shall not constitute a wavier by a Partner of his rights
hereunder.

         9.6 Integration. This Partnership Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof. It shall not be changed, modified or amended except in writing
and signed by all the parties affected thereby.

         9.7 Severability. If any provisions to this Partnership Agreement or
the application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the


                                       17
<PAGE>

remainder of this Partnership Agreement and the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

         9.8 Amendments. This Agreement may be amended only by the written
consent of the General Partners and Limited Partners representing at least a
majority of the Profit-Sharing Percentages; provided that no amendment will be
valid as to any Limited Partner which alters or modifies this Section 9.8.
Notwithstanding anything in this Agreement to the contrary, this Agreement may
be amended by the General Partners in order to cure any ambiguity, provide
clarity or to correct or supplement any provision herein.


                                       18
<PAGE>

         IN WITNESS WHEREOF, this Partnership Agreement is hereby executed as of
___________, 2000.


                                  TEMPLE-INLAND FOREST PRODUCTS CORPORATION


                                  By:     /s/Harold C. Maxwell
                                          ------------------------------------
                                  Name:   Harold C. Maxwell
                                          ------------------------------------
                                  Title:  President
                                          ------------------------------------



                                  TEMPLE GYPSUM COMPANY


                                  By:     /s/Julie L. Lenk
                                          ------------------------------------
                                  Name:   Julie L. Lenk
                                          ------------------------------------
                                  Title:  Assistant Treasurer
                                          ------------------------------------



                                  GYPSUM MGC, INC.


                                  By:      /s/Thomas V. Brown
                                          ------------------------------------
                                           Thomas V. Brown
                                           President



                                  MCQUEENEY GYPSUM COMPANY, LLC


                                  By:      MCQUEENEY GYPSUM COMPANY, its
                                           sole member

                                           By:  /s/Thomas V. Brown
                                                ------------------------------
                                                Thomas V. Brown
                                                President

                                      S-1