<PAGE>

                                                                     EXHIBIT 4.3

                                                      EXECUTION COPY


                                 $115,000,000

                       SECOND AMENDMENT AND RESTATEMENT

                         dated as of June 27, 2000

                                      of

                               CREDIT AGREEMENT

                           dated as of July 15, 1998

                                     among

                         Republic Group Incorporated


                            The Banks Party Hereto


                   The LC Issuing Banks Referred to Herein


                                      and

                            Bank of America, N.A.,
                            as Administrative Agent

                       ________________________________

                        Banc of America Securities LLC,
                                   Arranger
<PAGE>

                       SECOND AMENDMENT AND RESTATEMENT

          SECOND AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT dated as of June
     27, 2000 among REPUBLIC GROUP INCORPORATED, the BANKS listed on the
     signature pages hereof, the LC ISSUING BANKS referred to herein and BANK OF
     AMERICA, N.A., (successor to NationsBank, N.A.), as Administrative Agent.


                             W I T N E S S E T H :

          WHEREAS, the parties hereto have heretofore entered into a Credit
     Agreement dated as of July 15, 1998, as amended and restated by the First
     Amendment and Restatement, dated as of March 1, 2000 (the "Agreement"); and

          WHEREAS, the parties hereto desire to amend the Agreement as set forth
     herein and to restate the Agreement in its entirety to read as set forth in
     the Agreement with the amendments specified below;

          NOW, THEREFORE, the parties hereto agree as follows:

          SECTION 1. Definitions; References. Unless otherwise specifically
     defined herein, each capitalized term used herein which is defined in the
     Agreement shall have the meaning assigned to such term in the Agreement.
     Each reference to "hereof", "hereunder", "herein" and "hereby" and each
     other similar reference and each reference to "this Agreement" and each
     other similar reference contained in the Agreement shall from and after the
     date hereof refer to the Agreement as amended and restated hereby.

          SECTION 2.  Amendment of the Agreement.

          (a)  The definition of "Interest Period" is amended to (i) delete the
     word "and" at the end of clause (c); (ii) insert "; and" at the end of
     clause (d); and (iii) insert the following as clause (e);

               (e) no Interest Period for a Revolving Credit Loan beginning
          before the Reduction Date shall extend beyond the Reduction Date if,
          after giving effect thereto, the aggregate principal amount of
          Revolving Credit Loans
<PAGE>

          having Interest Periods extending beyond the Reduction Date exceeds
          $40,000,000.

          (b)  The following new defined terms are added to Section 1.01 in the
     appropriate alphabetical position:

               "Consolidated Net Senior Debt" means, at any date, Consolidated
          Net Debt other than Qualifying Subordinated Debt.

               "Qualifying Subordinated Debt" means, at any date, the
          Subordinated Notes and all other Debt of the Borrower which is
          subordinated to the Loans pursuant to subordination provisions, and
          which is issued on such other terms and conditions, as are
          satisfactory to the Administrative Agent.

               "Reduction Date" means April 2, 2001 (or if such date is not a
          Euro-dollar Business Day the next preceding Euro-Dollar business Day).

          (c)  A new subsection 2.08(c) is added to the Agreement to read in its
     entirety as follows:

               (c)  Reduction Date. On the Reduction Date, if not theretofore
          reduced to the same or a lesser amount, the Revolving Credit
          Commitments shall be ratably reduced to an aggregate amount of
          $40,000,000.

               (d)  Section 5.11 is amended to read as follows:

                    SECTION 5.11. Net Debt to EBITDA. At any date during each
               period set forth below, the ratio of (i) Consolidated Net Debt at
               such date to (ii) Consolidated EBITDA for the period of four
               consecutive Fiscal Quarters most recently ended on or prior to
               such date will not exceed the ratio set forth below opposite such
               period:

     ---------------------------------------------------------------------------
                  Period                                       Ratio
     ---------------------------------------------------------------------------
     3/31/2001 - 9/29/2001                      4.00:1
     ---------------------------------------------------------------------------
     9/30/2001 - 9/29/2002                      3.00:1
     ---------------------------------------------------------------------------
     9/30/2002 and thereafter                   2.50:1
     ---------------------------------------------------------------------------

                                       3

<PAGE>

          (e) Section 5.14 is amended as follows: (i) changing the figure
     "$69,915,200" to "$100,000,000" and (ii) replacing each reference to March
     31, 1998" with "June 30, 2000".

          (f) A new Section 5.20 is added to the Agreement to read in its
     entirety as follows:

          SECTION 5.20. Net Senior Debt to EBITDA. At any date, the ratio of (i)
     Consolidated Net Senior Debt at such date to (ii) Consolidated EBITDA for
     the period of four consecutive Fiscal Quarters most recently ended on or
     prior to such date will not exceed 2.50 to 1.00.

          SECTION 3. Waiver. The Banks hereby waive any Default arising from a
     violation of Section 5.14 existing prior to the Second Restatement
     Effective Date.

          SECTION 4. Change in Commitments. With effect from and including the
     date this Second Amendment and Restatement becomes effective in accordance
     with Section 8 hereof, the Revolving Credit Commitment of each Bank shall
     be the amount set forth opposite the name of such Bank on the attached
     Commitment Schedule, which shall replace the existing Commitment Schedule.

          SECTION 5. Change in Pricing Schedule. With effect from and including
     the date this Second Amendment and Restatement becomes effective in
     accordance with Section 8 hereof, the attached Pricing Schedule shall
     replace the existing Pricing Schedule.

          SECTION 6. Representations and Warranties. The Borrower hereby
     represents and warrants that as of the date hereof and after giving effect
     hereto:

          (a)  no Default has occurred and is continuing; and

          (b)  each representation and warranty of the Borrower set forth in the
     Agreement after giving effect to this Second Amendment and Restatement is
     true and correct as though made on and as of such date;

          SECTION 7. Governing Law. This Second Amendment and Restatement shall
     be governed by and construed in accordance with the laws of the State of
     New York.

          SECTION 8. Counterparts; Effectiveness. This Second Amendment and
     Restatement may be signed in any number of counterparts, each of which
     shall be an original, with the same effect as if the signatures thereto and
     hereto were upon

                                       4

<PAGE>

     the same instrument. This Second Amendment and Restatement shall become
     effective as of the date hereof when the Administrative Agent shall have
     received:

               (a)  duly executed counterparts hereof signed by each of the
          parties hereto (or, in the case of any party as to which an executed
          counterpart shall not have been received, telegraphic, telex or other
          written confirmation from such party of execution of a counterpart
          hereof by such party);

               (b)  a consent to this Second Amendment and Restatement in form
          and substance satisfactory to the Administrative Agent, duly executed
          by each of the Subsidiary Guarantors;

               (c)  a modification to the Mortgage, Assignment of Leases and
          Rents, Security Agreement and Financing Statement dated as of July 15,
          1998 by Republic Paperboard in favor of NationsBank, N.A. (predecessor
          to Bank of America, N.A.), in form and substance satisfactory to the
          Administrative Agent, duly executed by Republic Paperboard, it being
          understood that such modification will not increase the principal
          amount of Loans secured thereby;

               (d)  a certificate of a duly authorized officer of the Borrower
          as to the accuracy of the representations and warranties set forth in
          Section 6 hereof;

               (e)  an opinion of Locke Liddell & Sapp LLP, Dallas, Texas,
          substantially to the effect of Exhibit F-1 to the Agreement with
          reference to this Second Amendment and Restatement and the Agreement
          as amended and restated hereby;

               (f)  all documents it may reasonably request relating to the
          existence of the Borrower, the corporate authority for and the
          validity of the Agreement as amended and restated hereby, and any
          other matters relevant hereto, all in form and substance satisfactory
          to the Administrative Agent; and

               (g)  payment by the Borrower of (i) an amendment fee in the
          amount of $5,000 for each Bank which signs this Second Amendment and
          Restatement; (ii) a participation fee for each Bank whose Credit
          Exposure after giving effect to this Second Amendment and Restatement
          exceeds its Credit Exposure under the Agreement, in an amount equal to
          0.25% of such excess; and (iii) all fees and expenses payable by the
          Borrower pursuant to Section 9.03 of the Agreement in connection
          herewith.

                                       5

<PAGE>

     The Administrative Agent shall promptly notify the Borrower and the Banks
     of the effectiveness of this Second Amendment and Restatement, and such
     notice shall be conclusive and binding on all parties hereto.

                                       6

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Second
     Amendment and Restatement to be duly executed by their respective
     authorized officers as of the day and year first above written.


                    REPUBLIC GROUP INCORPORATED


                    By: /s/ Doyle R. Ramsey
                        ----------------------------------------
                        Title: Executive Vice President and CFO

                    BANK OF AMERICA, N.A.


                    By: /s/ Thomas R. Mahoney
                        ----------------------------------------
                        Title: Senior Vice President

                    COMERICA BANK - TEXAS


                    By: /s/ Paul L. Strange
                        ----------------------------------------
                        Title: Vice President


                    COMMERCE BANK, N.A.


                    By: /s/ Dennis R. Block
                        ----------------------------------------
                        Title: Senior Vice Presient
<PAGE>

                    FIRST UNION NATIONAL BANK


                    By: /s/ J. Andrew Phelps
                        ----------------------------------------
                        Title: Vice President


                    FIRSTAR BANK, N.A.
                    (as successor to Mercantile Bank)

                    By: /s/ Barry P. Sullivan
                        ----------------------------------------
                        Title: Vice President


                    UMB BANK N.A.


                    By: /s/ Terry Dierks
                        ----------------------------------------
                        Title: Senior Vice President


                    PLAINS NATIONAL BANK

                    By: /s/ Darrell W. Adams
                        ----------------------------------------
                        Title: Senior Vice President
<PAGE>

                    BANK OF AMERICA, N.A.,
                    as Administrative Agent


                    By: /s/ Thomas R. Mahoney
                        ----------------------------------------
                        Title: Senior Vice President
<PAGE>

                              COMMITMENT SCHEDULE


                                      Revolving
                                      Credit
Bank                                  Commitment               Term Loans
-----------------------------------   --------------           --------------
Bank of America, N.A.                 $13,750,000.00           $15,000,000.00
Comerica Bank - Texas                 $ 9,308,750.00           $10,155,000.00
Commerce Bank, N.A.                   $ 6,063,750.00           $ 6,615,000.00
First Union National Bank             $ 5,871,250.00           $ 6,405,000.00
Firstar Bank, N.A. (as successor to
Mercantile Bank)                      $ 8,456,250.00           $ 9,225,000.00
UMB Bank, N.A.                        $ 8,250,000.00           $ 9,000,000.00
Plains National Bank                  $ 3,300,000.00           $ 3,600,000.00
                                      --------------           --------------
       Total                          $   55,000,000           $   60,000,000
<PAGE>

                               PRICING SCHEDULE

     "Base Rate Margin" means on any date the rate per annum set forth below in
the column corresponding to the Pricing Level that applies on such day:


<TABLE>
<CAPTION>
Pricing Level         Level I        Level II        Level III         Level IV         Level V         Level VI         Level VII
-------------         -------        --------        ---------         --------         -------         --------         ---------
<S>                   <C>            <C>             <C>               <C>              <C>             <C>              <C>
Base Rate Margin          --               --             0.25%           0.50%            0.75%             0.75%             1.00%
</TABLE>

     "Commitment Fee Rate" means on any date the rate per annum set forth below
in the column corresponding to the Pricing Level that applies on such day:


<TABLE>
<CAPTION>
Pricing Level         Level I        Level II        Level III         Level IV         Level V         Level VI         Level VII
-------------         -------        --------        ---------         --------         -------         --------         ---------
<S>                   <C>            <C>             <C>               <C>              <C>             <C>              <C>
Commitment Fee           0.30%           0.35%           0.375%           0.375%           0.40%            0.40%              0.40%
Rate
</TABLE>


     "Euro-Dollar Margin" means on any date the rate per annum set forth below
in the column corresponding to the Pricing Level that applies on such day:


<TABLE>
<CAPTION>
Pricing Level         Level I        Level II        Level III         Level IV         Level V         Level VI         Level VII
-------------         -------        --------        ---------         --------         -------         --------         ---------
<S>                   <C>            <C>             <C>               <C>              <C>             <C>              <C>
Euro-Dollar           0.75%              1.00%            1.25%            1.50%           1.75%            2.00%             2.25%
Margin
</TABLE>


     "LC Fee Rate" means on any date the rate per annum set forth below in the
column corresponding to the Pricing Level that applies on such day:


<TABLE>
<CAPTION>
Pricing Level         Level I        Level II        Level III         Level IV         Level V         Level VI         Level VII
-------------         -------        --------        ---------         --------         -------         --------         ---------
<S>                   <C>            <C>             <C>               <C>              <C>             <C>              <C>
LC Fee Rate              0.75%           1.00%            1.25%            1.50%            1.75%           2.00%             2.25%
</TABLE>
<PAGE>

          For purposes of this Schedule, the following terms have the following
     meanings:

          "Applicable Leverage Ratio" means, at any date, the ratio of (i)
     Consolidated Debt at the last day (the "Measurement Date") of the Fiscal
     Quarter most recently ended on or prior to such date with respect to which
     the Borrower has delivered the financial statements required to be
     delivered by it pursuant to Section 5.01(a) or 5.01(b), as the case may be,
     to (ii) Consolidated EBITDA for the period of four consecutive Fiscal
     Quarters ended on the Measurement Date; provided that for each day from and
     including the date on which the Borrower is required to deliver the
     financial statements described in Section 5.01(a) or 5.01(b), as the case
     may be, for its most recently ended Fiscal Quarter to but excluding the
     date on which such financial statements are so delivered, the Applicable
     Leverage Ratio shall be deemed to exceed 3.50:1.

          "Level I Pricing" applies on or after the Conversion Date at any date
     if at such date the Applicable Leverage Ratio is less than or equal to
     1.0:1.

          "Level II Pricing" applies on or after the Conversion Date at any date
     if at such date (i) the Applicable Leverage Ratio is less than or equal to
     1.5:1 and (ii) Level I Pricing does not apply.

          "Level III Pricing" applies on or after the Conversion Date at any
     date if at such date (i) the Applicable Leverage Ratio is less than or
     equal to 2.0:1 and (ii) neither Level I Pricing nor Level II Pricing
     applies.

          "Level IV Pricing" applies at any date if at such date (i) the
     Applicable Leverage Ratio is less than or equal to 2.5:1 and (ii) none of
     Level I Pricing, Level II Pricing and Level III Pricing applies.

          "Level V Pricing" applies at any date if at such date (i) the
     Applicable Leverage Ratio is less than or equal to 3.0:1 and (ii) none of
     Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing
     applies.

          "Level VI Pricing" applies at any date if at such date (i) the
     Applicable Leverage Ratio is less than or equal to 3.5:1 and (ii) none of
     Level I Pricing, Level II Pricing, Level III Pricing, Level IV Pricing and
     Level V Pricing applies.

           "Level VII Pricing" applies on any day if no other Pricing Level
     applies on such day.

          "Pricing Level" refers to the determination of which of Level I, Level
     II, Level III, Level IV, Level V, Level VI or Level VII Pricing applies on
     any day.