|   | (a)      The Participant shall be permitted to at anytime or from time to time      after December 16, 2003, transfer shares of the Stock to any of his      spouse, his children (or their spouses), his grandchildren, or trusts for      the benefit of any of the foregoing ("Permitted Transferees"); provided      that the limitations, restrictions and other provisions of the Agreement      shall continue to apply in respect of any shares of Stock so transferred      ("Transferred Shares"). This means, for instance, that any Transferred      Shares will be subject to the nontransferability provisions of Section 4      of the Agreement and that, pursuant to the second sentence of Section 6 of      the Agreement, any Transferred Shares will revert back to the Company in      the event that Participant ceases to be in the employ of the Company at      any time during the Restricted Period for any reason other than his death      or permanent disability. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b)      The Participant agrees to notify any Permitted Transferee who is to      receive Transferred Shares of subsection (a) above and to cause such      Permitted Transferee to execute any instrument reasonably requested by the      Company in connection with the transfer to the Permitted Transferee,      including an acknowledgment of subsection (a)  above. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c)      The certificates evidencing the Transferred Shares shall bear any legends      they currently contain and any other legends that the Company may      reasonably require in connection with any transfer to a Permitted      Transferee. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| /s/      Charles E. Hurwitz |                       |   |
|-----------------------------|----------------------------|--------|
| Charles      E. Hurwitz     |                       |   |
|                        |                       |   |
|                        |                       |   |
|                        |                       |   |
| MAXXAM      INC.            |                       |   |
|                        |                       |   |
| By:                         | /s/      Bernard L. Birkel |   |   |
| Name:                       | Bernard      L. Birkel     |   |   |
| Title:                      | Secretary                  |   |   |
|                        |                       |   |

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