Document:

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                                                                    EXHIBIT 4.25

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                            INDUSTRIAL BUILDING LEASE

                                 by and between

                           FORTRA FIBER-CEMENT L.L.C.,
                      a Delaware limited liability company,
                                  as Landlord,

                                       and

                      JAMES HARDIE BUILDING PRODUCTS, INC.,
                              a Nevada corporation,
                                    as Tenant

                                 OCTOBER 6, 2000

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                      HEADING                               PAGE
<S>                                                                                <C>
ARTICLE 1              GRANT OF LEASE; PREMISES ................................     1

ARTICLE 2              TERM; POSSESSION ........................................     1

     Section 2.1.      Term ....................................................     1
     Section 2.2.      Condition of Premises ...................................     2
     Section 2.3.      Equipment, Raw Materials and Other Personal Property ....     2
     Section 2.4.      Assignment of Contracts and Permits .....................     3

ARTICLE 3              BASE RENT ...............................................     4

     Section 3.1.      Rent ....................................................     4
     Section 3.2.      Manner of Payment .......................................     5
     Section 3.3.      Late Charge..............................................     5

ARTICLE 4              ADDITIONAL RENT; IMPOSITIONS ............................     5

     Section 4.1.      Obligation to Pay Impositions ...........................     5
     Section 4.2.      Payment by Tenant .......................................     5
     Section 4.3.      Alternative Taxes .......................................     6
     Section 4.4.      Evidence of Payment .....................................     6
     Section 4.5.      Right to Contest ........................................     6
     Section 4.6.      Representations and Warranties...........................     7
     Section 4.7.      Survival ................................................     7
     Section 4.8.      Personal Property Taxes and Rent Taxes ..................     7
     Section 4.9.      Additional Rent .........................................     8

ARTICLE 5              GUARANTIES ..............................................     8

     Section 5.1.      Tenant's Guaranty .......................................     8
     Section 5.2.      Landlord's Guaranty .....................................     9

ARTICLE 6              USE OF PREMISES .........................................     9

     Section 6.1.      Permitted Uses ..........................................     9
     Section 6.2.      Prohibited Uses .........................................     9
     Section 6.3.      Adverse Possession ......................................     9
     Section 6.4.      Use of Parking Areas ....................................    10
     Section 6.5.      Compliance with Bond Documents ..........................    10

ARTICLE 7              UTILITIES AND SERVICES ..................................    11

     Section 7.1.      Utilities and Services ..................................    11
     Section 7.2.      Failure to Furnish Utilities or Services ................    11
     Section 7.3.      Regulations Regarding Utilities and Services ............    11
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                <C>
ARTICLE 8              CONDITION AND CARE OF PREMISES ..........................   11

     Section 8.1.      Condition of the Premises ...............................   11
     Section 8.2.      Tenant Obligations ......................................   11
     Section 8.3.      Landlord Obligations ....................................   12
     Section 8.4.      Compliance with Laws, Rules and Regulations .............   12

ARTICLE 9              RETURN OF PREMISES.......................................   13

     Section 9.1.      Surrender of Possession .................................   13
     Section 9.2.      Installations and Additions .............................   13
     Section 9.3.      Trade Fixtures and Personal Property ....................   13
     Section 9.4.      Survival ................................................   14

ARTICLE 10             HOLDING OVER ............................................   14

ARTICLE 11             [INTENTIONALLY DELETED] .................................   15

ARTICLE 12             RIGHTS RESERVED TO LANDLORD..............................   15

ARTICLE 13             ALTERATIONS .............................................   15

ARTICLE 14             ASSIGNMENT AND SUBLETTING ...............................   16

     Section 14.1.     Assignment and Subletting ...............................   16
     Section 14.2.     Rentals Based on Net Income .............................   17
     Section 14.3.     Tenant to Remain Obligated ..............................   17
     Section 14.4.     Landlord's Consent.......................................   17
     Section 14.5.     Assignee to Assume Obligations ..........................   18
     Section 14.6.     Indirect Assignments ....................................   18

ARTICLE 15             WAIVER OF CERTAIN CLAIMS; INDEMNITY......................   18

     Section 15.1.     Waiver of Certain Claims; Indemnity by Tenant ...........   18
     Section 15.2.     Damage Caused by Tenant's Negligence ....................   19
     Section 15.3.     Tenant Responsible for Personal Property ................   19
     Section 15.4.     Indemnification .........................................   19
     Section 15.5.     Survival ................................................   20

ARTICLE 16             DAMAGE OR DESTRUCTION BY CASUALTY .......................   20

ARTICLE 17             EMINENT DOMAIN ......................... ................   20

ARTICLE 18             EVENT OF DEFAULT ........................................   21

     Section 18.1.     Events of Default .......................................   21
     Section 18.2.     Rights and Remedies of Landlord ................ ........   22
     Section 18.3.     Right to Re-Enter .......................................   22
</TABLE>

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<PAGE>

<TABLE>
<S>                                                                                       <C>
     Section 18.4.     Periodic Damages ..............................................    23
     Section 18.5.     Liquidated and Associated Damages .............................    24
     Section 18.6.     Storage, Removal and Sale of Personal Property ................    24
     Section 18.7.     Attorneys' Fees ...............................................    25
     Section 18.8.     [Intentionally Deleted] .......................................    25
     Section 18.9.     Landlord Default ..............................................    25

ARTICLE 19             SUBORDINATION .................................................    25

     Section 19.1.     Subordination .................................................    25
     Section 19.2.     Liability of Holder of Mortgage; Attornment....................    26
     Section 19.3.     Short Form Lease ..............................................    26

ARTICLE 20             MORTGAGEE PROTECTION ..........................................    26

ARTICLE 21             ESTOPPEL CERTIFICATE ..........................................    27

ARTICLE 22             SUBROGATION AND INSURANCE .....................................    27

     Section 22.1.     Waiver of Subrogation .........................................    27
     Section 22.2.     Tenant's Insurance ............................................    28
     Section 22.3.     Evidence of Insurance .........................................    29
     Section 22.4.     Compliance with Requirements ..................................    30
     Section 22.5.     Proceeds of Certain Insurance .................................    30

ARTICLE 23             NONWAIVER .....................................................    30

ARTICLE 24             DUE AUTHORITY .................................................    31

ARTICLE 25             REAL ESTATE BROKERS ...........................................    31

ARTICLE 26             NOTICES .......................................................    31

ARTICLE 27             HAZARDOUS SUBSTANCES ..........................................    33

     Section 27.1.     Defined Terms .................................................    33
     Section 27.2.     Tenant's Obligations with Respect to Environmental Matters ....    34
     Section 27.3.     Copies of Notices .............................................    35
     Section 27.4.     Tests and Reports .............................................    35
     Section 27.5.     Access and Inspection .........................................    35
     Section 27.6.     Obligation to Respond .........................................    36
     Section 27.7.     Indemnification ...............................................    36

ARTICLE 28             TITLE AND COVENANT AGAINST LIENS ..............................    37
</TABLE>

                                      -iii-
<PAGE>

<TABLE>
<S>                                                                        <C>
ARTICLE 29             MISCELLANEOUS..................................     37

     Section 29.1.     Successors and Assigns.........................     37
     Section 29.2.     Modifications in Writing.......................     37
     Section 29.3.     No Option; Irrevocable Offer...................     37
     Section 29.4.     Definition of Tenant...........................     38
     Section 29.5.     Definition of Landlord.........................     38
     Section 29.6.     Headings.......................................     38
     Section 29.7.     Time of Essence................................     38
     Section 29.8.     Default Rate of Interest.......................     38
     Section 29.9.     Severability...................................     38
     Section 29.10.    Entire Agreement...............................     38
     Section 29.11.    Force Majeure..................................     38
     Section 29.12.    Survival.......................................     39
     Section 29.13.    Relationship of Parties........................     39
     Section 29.14.    Surrender......................................     39
     Section 29.15.    No Merger......................................     39
     Section 29.16.    Governing Law..................................     39
     Section 29.17.    Quiet Possession...............................     39
     Section 29.18.    Landlord's Lien Waiver.........................     40
     Section 29.19.    Intent - Triple Net Lease......................     40
     Section 29.20.    Usury..........................................     40
     Section 29.21.    Financial Statements...........................     40
     Section 29.22.    Consents and Approvals.........................     40
     Section 29.23.    Option to Purchase.............................     40
     Section 29.24.    Right of First Refusal.........................     41

ARTICLE 30             DEFINITIONS....................................     41
</TABLE>

Exhibit A - Legal Description
Exhibit B - Schedule of Personal Property
Exhibit C - Tenant Guaranty
Exhibit D - Landlord Guaranty
Exhibit E - Form of Confidentiality Undertaking
Exhibit F - Schedule of Leased Equipment

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<PAGE>

                            INDUSTRIAL BUILDING LEASE

      THIS LEASE made this 6th day of October, 2000, by and between FORTRA
FIBER-CEMENT L.L.C., a Delaware limited liability company, hereinafter referred
to as "Landlord," and JAMES HARDIE BUILDING PRODUCTS, INC., a Nevada
corporation, hereinafter referred to as "Tenant."

                                    ARTICLE 1

                            GRANT OF LEASE; PREMISES

      For and in consideration of the rent hereinafter reserved and the
covenants and conditions hereof, Landlord does hereby lease to Tenant, and
Tenant rents from Landlord, the parcel of land comprising approximately
forty-five (45) acres, legally described on Exhibit A attached hereto and made a
part hereof, upon which is situated a building containing approximately 335,610
square feet, together with all other improvements now located or to be located
thereon during the Term (as that term is defined below) and all appurtenances
belonging to or in any way pertaining to the said premises, located in
Waxahachie, Ellis County, Texas (the "Premises") and all Personal Property (as
that term is defined below).

      Tenant agrees to comply with all covenants, conditions and restrictions of
record as they relate to the conduct of Tenant and its use and occupancy of the
Premises. No amendment to any such covenants, conditions and restrictions of
record shall materially interfere with Tenant's right to use the Premises under
this Lease without Tenant's consent, not to be unreasonably withheld or delayed.
Landlord agrees to cooperate with Tenant, at no material out-of-pocket expense
to Landlord, in connection with any effort by Tenant to obtain a survey of the
Premises and a leasehold policy of title insurance or commitment therefor
showing title to the Premises in Landlord free and clear of any third-party
rights or options to purchase the Premises. Tenant agrees to furnish Landlord
copies of any such title insurance policy or commitment therefor and survey of
the Premises obtained by Tenant.

      Tenant acknowledges that certain facilities (the "Bond-Financed Project")
constituting a portion of the Premises were financed with the proceeds of the
Waxahachie Industrial Development Authority Waste Disposal Revenue Bonds
(Temple/Re-Con Inc. Project) Series 1998 (the "Bonds"), which are tax-exempt
obligations issued pursuant to Sections 103 and 142(a)(5)&(6) of the Internal
Revenue Code of 1986. In connection with the issuance of the Bonds, Landlord has
made certain covenants and representations regarding the use of the
Bond-Financed Project, which remain enforceable and effective as of the date
hereof.

                                    ARTICLE 2

                                TERM; POSSESSION

      Section 2.1. Term. The term of this Lease ("Term") shall commence upon
October 7, 2000 (the "Commencement Date") and shall expire without the further
action of the parties hereto on the date two hundred thirty-three (233) months
and twenty-four (24) days after the Commencement Date

<PAGE>

at 5:00 p.m. CST on March 31, 2020 (the "Expiration Date"), unless sooner
terminated as provided herein.

      Section 2.2. Condition of Premises. Tenant agrees that the Premises and
the Personal Property are being leased by Landlord, and are hereby accepted by
Tenant, in their existing physical condition, AS IS, WITH ALL FAULTS, without
any agreements, representations, understandings or obligations on the part of
Landlord, except as expressly set forth in this Lease. Landlord agrees to
deliver possession of the Premises to Tenant in a shut down state free of scrap
and refuse and with all tanks, process equipment, pipe-work and vats clean and
clear of all process material, except for tanks and vats used to store Raw
Materials (as that term is defined below).

      Section 2.3. Equipment, Raw Materials and Other Personal Property.

      (a) Personal Property. The "Personal Property" is hereby defined as all
furniture, furnishings, office equipment, lab equipment and production equipment
(other than Surplus Equipment (as that term is defined below)) located on the
Premises and described in Exhibit B attached hereto (but excluding all computer
hardware and software not related to the manufacturing processes conducted in
the Premises by Landlord, raw materials, spare and replacement parts and
finished goods).

      (b) Equipment. Tenant has identified to Landlord the production equipment
currently located in the Premises which is not necessary in the operation of its
business, together with Spare Parts (as that term is hereafter defined) which
relate thereto (the "Surplus Equipment"). Landlord agrees to furnish Tenant
notice on or before October 12, 2000 of which items of Surplus Equipment
Landlord intends to remove from the Premises as set forth herein. Thereafter,
and until and through November 6, 2000, Landlord may remove from the Premises
without compensation to Tenant the Surplus Equipment described in Landlord's
notice at Landlord's sole cost and expense. Landlord may remove from the
Premises through November 6, 2000 the sawline from the finishing area and
scissors lifts identified by Tenant at Landlord's sole cost and expense. In
consideration of Ten and 00/100 Dollars ($10.00) and the right to one-half of
all net proceeds of the sale thereof as set forth hereinbelow, the remaining
Surplus Equipment shall become the property of Tenant on and as of the
Commencement Date. Tenant agrees to use commercially reasonable efforts to sell
the Surplus Equipment not removed by Landlord on or before May 31, 2001 at
prices reasonably acceptable to Tenant. In the event any such Surplus Equipment
is not sold as of May 31, 2001, Landlord shall have the right but not the
obligation to remove any such remaining Surplus Equipment on or before June 30,
2001. Tenant hereby grants Landlord and its agents access to the Premises for
thirty (30) days commencing on each of the Commencement Date and June 1, 2001
for the purpose of removing the sawline, scissors lifts and such Surplus
Equipment as set forth above. Landlord shall remove such equipment in a manner
so as not to unreasonably interfere with Tenant's operations and business at the
Premises. Tenant acknowledges that it is refurbishing portions of the Premises
prior to beginning manufacturing operations therein and that Landlord shall not
be obligated to repair any non-material non-structural damage or any
non-structural damage to portions of the Premises which Tenant is refurbishing
that may be caused by such removal. The proceeds of all Surplus Equipment sold
under this Section 2.3(b) net of the reasonable and customary out-of-pocket
costs and expenses of such sales shall be distributed in equal halves to each of
Tenant and Landlord promptly upon receipt.

                                      -2-
<PAGE>

      (c) Raw Materials. Tenant agrees to identify any raw materials located in
the Premises on the Commencement Date which, in Tenant's good faith judgment,
are useable in Tenant's operations (the "Raw Materials") by written notice
delivered to Landlord on or before October 16, 2000. Tenant shall purchase all
such Raw Materials by paying Landlord a sum equal to the lesser of Landlord's
cost thereof, as evidenced by paid receipts, cancelled checks or other
reasonable documentation, or Tenant's replacement cost therefor, as evidenced by
current vendor information, on or before October 26, 2000.

      (d) Spare Parts. Tenant agrees to purchase all spare and replacement parts
located in the Premises on the Commencement Date (the "Spare Parts") by paying
Landlord a sum equal to the book value thereof less the book value of (i) such
Spare Parts which relate to Surplus Equipment, (ii) such Spare Parts which are
deemed by Tenant to be kept in excess of Tenant's spare parts requirements,
(iii) the ball mill included in Spare Parts and (iv) individual items with a
book value of less than $500 each, on or before October 26, 2000.

      (e) Finished Goods. Landlord shall remove all finished goods from the
finished goods storage area in the Premises on or before December 6, 2000.
Tenant hereby grants Landlord and its agents access to the Premises for the
purpose of storing and removing such finished goods as set forth above upon the
same terms set forth in Subsection 2.3(b) above.

      (f) Leased Equipment. Attached hereto as Exhibit F is a schedule of
certain equipment used in connection with the operation of the Premises (the
"Leased Equipment"). Landlord agrees to pay all rents payable under the leases
for the Leased Equipment in accordance with the terms and provisions thereof as
of the date hereof so that such Leased Equipment is available to Tenant in
accordance with the term of such leases. Tenant agrees to comply with the
obligations of the lessee under such leases except for the payment of rents
thereunder. On or before termination of each lease for Leased Equipment,
Landlord agrees to pay the terminal value thereunder or otherwise purchase any
reversionary interest of the lessor and to pay any other costs necessary to
convey such equipment to Tenant at such time for no additional consideration,
free and clear of any liens or encumbrances.

      Section 2.4. Assignment of Contracts and Permits.

      (a) Contracts. Landlord has furnished Tenant copies of all assignable
supply and other contracts related to the ownership, occupancy, operation and
maintenance of the Premises in Landlord's possession. Prior to the Commencement
Date, Tenant shall inform Landlord of which of such contracts, if any, Tenant
intends to assume (the "Contracts"). As of the Commencement Date, Tenant agrees
to assume all of Landlord's obligations under the Contracts accruing on or after
the Commencement Date, except as set forth in Section 2.3(f) above, and to
execute and deliver such instruments evidencing such assumption as may be
reasonably requested by Landlord or any other parties to any of the Contracts.

      (b) Permits. Landlord agrees to assign to Tenant as of the Commencement
Date any assignable permits and licenses related to (i) the ownership,
occupancy, operation and maintenance of the Premises and (ii) the Personal
Property. Tenant agrees to notify in writing the issuing authority of each such
permit and license of Tenant's occupancy of the Premises in accordance with the
requirements of such issuing authorities and all applicable laws, ordinances,
rules and regulations.

                                      -3-
<PAGE>

      (c) Warranties and Guaranties. Landlord agrees to assign to Tenant for the
Term of this Lease the benefit of any assignable warranty or guarantee, whether
express or implied, attaching to the Personal Property or the Premises and
Tenant agrees to assign the benefit of any such warranty or guarantee back to
Landlord at the expiration of this Lease. Landlord agrees to assign the benefit
of any assignable warranty or guarantee whether express or implied attaching to
the Raw Materials, Surplus Equipment or Spare Parts to Tenant. If Landlord holds
the benefit of any warranty or guarantee attaching to the Personal Property,
Premises, Raw Materials, Surplus Equipment or Spare Parts which benefit cannot
be assigned to Tenant, then on request by Tenant, Landlord agrees to use
commercially reasonable efforts to invoke that warranty or guarantee for the
benefit of Tenant, subject to Tenant's satisfaction of any conditions to the
enforceability of such warranty or guarantee.

                                    ARTICLE 3

                                    BASE RENT

      Section 3.1. Rent. Tenant shall pay to Landlord the following "Rents" for
the Premises and the Personal Property during the Term:

            (a) Base Rent. Tenant shall pay base rent ("Base Rent") to Landlord
      for the Premises commencing on the Commencement Date as follows:

<TABLE>
<CAPTION>
                                                       QUARTERLY BASE
         PERIOD                       BASE RENT            RENT
<S>                                  <C>               <C>
     October 7, 2000 -
    December 31, 2000                $   233,333       $      233,333

     January 1, 2001 -
     March 31, 2001                  $   250,000       $      250,000

  April 1, 2001 - March
   31, 2002, and each
  subsequent twelve (12)
 month period commencing
  April 1, through and
including April 1, 2019 -
     March 31, 2020                  $ 3,400,000       $      850,000
</TABLE>

All Base Rent shall be payable on October 7, 2000 and on the first day of each
and every calendar quarter thereafter during the Term and at the same rate for
fractions of a quarter if the Rent payments shall end on any day except the last
day of a calendar quarter.

      (b) Additional Rent. Tenant shall also pay "Additional Rent" consisting of
all sums of money (other than Base Rent) payable by Tenant as set forth herein,
whether payable on a regular, periodic, intermediate or other basis and
regardless of whether paid directly to Landlord or to another party or entity in
fulfillment of Tenant's obligations under this Lease.

                                      -4-
<PAGE>

      Section 3.2. Manner of Payment. Except as otherwise expressly provided
herein, Base Rent, Additional Rent, Impositions and all other amounts becoming
due from Tenant hereunder (collectively, "Rent") shall be paid in lawful money
of the United States of America to Landlord by wire transfer to Landlord's
account or as otherwise designated from time to time by written notice from
Landlord to Tenant. Without limiting the covenant of quiet enjoyment as set
forth in Section 29.17 below, the payment of Rent hereunder is independent of
each and every other covenant and agreement contained in this Lease, and Rent
shall be paid without any set off, abatement, counterclaim or deduction
whatsoever except as may be expressly provided herein. Concurrently with the
execution hereof, Tenant shall pay Landlord the first installment of Base Rent
payable hereunder and not as a security deposit under this Lease.

      Section 3.3. Late Charge. In the event that any payment of a second
installment of Base Rent due in any twelve (12) month period or any payment of
Additional Rent or Impositions shall not be received by Landlord or the payee
thereof within five (5) days of the due date thereof specified in this Lease,
then Tenant shall pay Landlord a late charge equal to the greater of (i) four
percent (4%) of the delinquent amount then due Landlord without regard to
source, or (ii) the late charge amount or other fee charged to Landlord by the
applicable vendor(s) or authority(s) in order to reimburse Landlord for
Landlord's costs, damages and all other expenses for such late payment. The
imposition of such late charge shall be in addition to, and shall not limit, any
other remedy available to Landlord under this Lease.

                                    ARTICLE 4

                          ADDITIONAL RENT; IMPOSITIONS

      Section 4.1. Obligation to Pay Impositions. In addition to paying the Base
Rent specified in Section 3.1 hereof, Tenant shall also pay as Additional Rent
under this Lease the Impositions determined in accordance with this Article 4.

      Section 4.2. Payment by Tenant. Notwithstanding anything to the contrary
contained herein or otherwise, but subject to and without limitation of the
first sentence of Section 4.8 below, this Lease shall be deemed to be construed
as a triple net lease and any and all expenses and obligations incurred or
accrued during the Term in connection with the Premises and the Personal
Property and the ownership, maintenance, repair and operation thereof,
including, without limitation, capital expenses, will be the obligation of the
Tenant, it being understood that Landlord shall receive the Base Rent set forth
in Section 3.1 hereof free and clear of any and all other impositions, taxes,
assessments, liens, charges or expenses of any nature whatsoever in connection
with the ownership, maintenance, repair and operation of the Premises and the
Personal Property, except for expenses and obligations arising from a default by
Landlord hereunder. Tenant shall pay as Additional Rent for the Premises all
taxes and assessments, general and special, water and sewer rates, charges or
taxes in lieu of real estate taxes, and all other impositions, foreseen or
unforeseen, ordinary and extraordinary, of every kind and nature whatsoever,
which may be levied, assessed, charged or imposed during the Term upon the
Premises, or any part thereof, or upon any improvements at any time situated
thereon or with respect to Rent payable hereunder (collectively, the
"Impositions"); provided, however, that (a) Impositions levied against the
Premises or any personal property conveyed to Tenant hereunder or by any bill of
sale shall be prorated between Landlord and Tenant as of the Commencement Date
for the first year of the Term and as of the Expiration Date for the last

                                      -5-
<PAGE>

year of the Term (in each case, on the basis of Landlord's reasonable estimate
thereof), and (b) all taxes attributable to the Premises or the Personal
Property or any personal property conveyed to Tenant hereunder or by any bill of
sale for any period prior to the Commencement Date and all taxes attributable to
Landlord's income and profit, franchise taxes, gross profit, revenue, federal
income taxes, state and local net income tax, federal excess profit taxes,
franchise, capital stock, business and federal or state estate or inheritance
taxes of Landlord and roll-back taxes attributable to change in use or ownership
by Landlord prior to the Commencement Date or all other taxes relating to
periods prior to the Term hereof, shall be the sole responsibility of Landlord
(collectively, the "Excluded Taxes"). Landlord hereby indemnifies and holds
harmless Tenant for all such Excluded Taxes, which indemnity shall survive the
expiration or termination of this Lease.

      Section 4.3. Alternative Taxes. If at any time during the Term, the method
of taxation prevailing at the commencement of the Term shall be altered so that
any new or additional tax, assessment, levy, imposition or charge, or any part
thereof, shall be imposed upon Landlord in place or partly in place of any such
impositions or contemplated increase therein, or in addition to Impositions, and
shall be measured by or be based in whole or in part upon this Lease or the
Premises or the Rent or other income therefrom, and shall be imposed upon
Landlord, then all such taxes, assessments, levies, impositions or charges, or
the part thereof, to the extent that they are so measured or based, shall be
deemed to be included within the definition of Impositions for the purposes
hereof to the extent that such Impositions would be payable if the Premises were
the only property of Landlord subject to such Impositions, and Tenant shall pay
and discharge the same as herein provided with respect to the payment of
Impositions, but not including any Excluded Taxes.

      Section 4.4. Evidence of Payment. Tenant shall deliver to Landlord
duplicate receipts (or photostatic copies thereof) evidencing the payments of
all Impositions within thirty (30) days after the respective payments evidenced
thereby to the extent that Tenant is obligated to pay same directly to the
applicable taxing authority pursuant to this Article 4.

      Section 4.5. Right to Contest. From and after the Commencement Date,
Tenant shall have the right, at its own cost and expense, to contest the amount
or validity, in whole or in part, of any Imposition by appropriate proceedings
diligently conducted in good faith, but only after payment of such Imposition or
reserves set aside for the same, unless such payment, or a payment thereof under
protest, would operate as a bar to such contest or interfere materially with the
prosecution thereof, in which event, notwithstanding the provisions of this
Section 4.5, Tenant may postpone or defer payment of such Imposition if (i)
neither the Premises nor any portion thereof would, by reason of such
postponement or deferment, be in danger of being forfeited or lost, and (ii) if
Tenant has assigned this Lease other than to an affiliate under common Control
(as that term is defined below) with Tenant, Tenant or its assignee shall have
deposited with Landlord in an escrow account cash payable to Landlord in the
amount of the Imposition so contested and unpaid, together with all interest and
penalties which may accrue in Landlord's reasonable judgment in connection
therewith, and all charges that may or might be assessed against or become a
charge on the Premises or any portion thereof during the pendency of such
proceedings, or such other form of security reasonably satisfactory to Landlord.
Tenant shall have the right, subject to Landlord's approval, not to be
unreasonably withheld, delayed or conditioned, to select the counsel to be
retained in connection with the prosecution of any such proceedings. If, during
the continuance of such proceedings, Landlord shall, from time to time,
reasonably deem in good faith that the amount deposited, if any, as aforesaid,
is insufficient, Tenant shall, upon demand of Landlord, make additional deposits
of such additional sums of money as Landlord may reasonably request. Upon
failure of Tenant to make

                                      -6-
<PAGE>

such additional deposits, the amount theretofore deposited, together with sums
deposited in the Tax Account, may be applied by Landlord to the payment, removal
and discharge of such Imposition and any interest, fines and penalties incurred
or imposed in connection therewith, and any costs, fees (including reasonable
attorneys' fees) and other liability (including costs incurred by Landlord)
accruing in any such proceedings. Upon the termination of any such proceedings,
Tenant shall pay the amount of such Imposition or part thereof, if any, as
finally determined in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings, together with any costs,
fees, including reasonable attorneys' fees, interest, penalties, fines and other
liability incurred or imposed in connection therewith, and upon such payment
Landlord shall return all amounts deposited with it with respect to the contest
of such Imposition, as aforesaid, or, at the written direction of Tenant,
Landlord shall make such payment out of the funds on deposit with Landlord and
the balance, if any, shall be returned to Tenant. Landlord shall not be required
to join in any proceedings referred to in this Section 4.5 unless the provisions
of any law, rule or regulation at the time in effect shall require that such
proceedings be brought by or in the name of Landlord, in which event Landlord
shall join in such proceedings or permit the same to be brought in Landlord's
name upon compliance with such conditions as Landlord may reasonably require,
including, without limitation, representation by legal counsel of its choice.
Landlord shall not ultimately be subject to any liability for the payment of any
fees, including attorneys' fees, costs and expenses incurred or imposed in
connection with such proceedings. Tenant agrees to pay all such fees (including
reasonable attorneys' fees), costs and expenses, or, on demand, to make
reimbursement to Landlord for such payment. Subject to the foregoing, Landlord
agrees to cooperate with Tenant, at no material out-of-pocket expense to
Landlord, in connection with any efforts by Tenant to obtain any available
abatements, reductions, rebates, reassessments of valuation or other relief with
respect to the Impositions.

      Section 4.6. Representations and Warranties. Tenant agrees and
acknowledges that Landlord has made no representation, warranty or guaranty
relating to the amount of the Impositions. Tenant has had an opportunity to
consult with Landlord with respect to the Impositions projected but has not
relied upon any statements or representations of Landlord or any agent or
affiliate of Landlord in regard thereto in executing this Lease and agreeing to
perform the terms and covenants hereof and shall make no claims against Landlord
based thereon, except for the Landlord's failure to pay such Impositions for
such periods prior to or after the Term.

      Section 4.7. Survival. Without limitation of other obligations of Tenant
which shall survive the expiration or earlier termination of this Lease, the
obligation of Tenant to pay Impositions or other Additional Rent provided for in
this Article 4 accruing during the Term shall survive such expiration or earlier
termination of this Lease for four (4) years.

      Section 4.8. Personal Property Taxes and Rent Taxes. Landlord shall have
no obligation to pay any personal property taxes assessed and charged with
respect to the Personal Property or any equipment, improvements or personal
property owned or leased by Tenant ("Personal Property Taxes"), provided,
however, that Landlord agrees to pay when due any such taxes assessed and
charged with respect to the Surplus Equipment for the entire year 2000 and
one-half of any such taxes assessed and charged with respect to the Surplus
Equipment for the first six (6) months of the year 2001. Tenant shall pay all
such taxes, related assessments and/or penalties prior to their becoming
delinquent or past due. In addition to the Base Rent and other items of
Additional Rent due under this Lease, Tenant shall pay to Landlord all state and
local taxes and assessments in the nature of sales or use taxes, rental taxes,
transaction privilege taxes, taxes based on the payment or

                                      -7-
<PAGE>

receipt of rent or taxes based on the use or occupancy of real property, along
with all related assessments, fees, costs, penalties and other charges, whether
or not such items are intended to be paid by landlords or owners of property to
the extent the foregoing are related to the Premises, but not including any
Excluded Taxes (collectively, "Rent Taxes"). Tenant covenants and agrees to pay
Rent Taxes to Landlord within thirty (30) days of written notice from Landlord,
and Tenant's failure to do so shall constitute a default under this Lease.

      Section 4.9. Additional Rent. All amounts payable by Tenant for any sum or
charge due hereunder including, without limitation, amounts paid as or on
account of Rent Taxes, shall be deemed to be, and collectible as, Additional
Rent due under this Lease and any failure to pay such amounts when due or upon
written demand by Landlord (should it elect to do so) shall be a default under
this Lease entitling Landlord to pursue any and all rights and remedies
available to Landlord for Tenant's failure to pay Rent.

                                    ARTICLE 5

                                   GUARANTIES

      Section 5.1. Tenant's Guaranty. As security for the performance of its
obligations under this Lease, Tenant, upon execution of this Lease, shall
furnish Landlord a Guaranty in the form of Exhibit C attached hereto (the
"Tenant Guaranty") from James Hardie NV, a Netherlands corporation
("Guarantor"). In the event the "Net Worth" (as that term is defined below) of
Guarantor falls below One Hundred Million and 00/100 Dollars ($100,000,000) at
any time during the Term, Tenant agrees to deliver prompt notice thereof to
Landlord together with a security deposit in the amount of One Million Seven
Hundred Thousand and 00/100 Dollars ($1,700,000) in cash or in the form of a
letter of credit in form and substance and issued by an issuer acceptable to
Landlord in its sole discretion (the "Security Deposit") as additional security
hereunder. Tenant agrees from time to time to pay Landlord within three (3)
business days following receipt of a request therefor, any sum or sums of money
paid or deducted therefrom by Landlord, in order that at all times during the
Term there shall be continually deposited with Landlord, a sum or letter of
credit which shall never be less than the amount originally required. The
Security Deposit shall not be deemed an advance payment of Rent, nor a measure
of damages for any default by Tenant under this Lease, nor shall the Security
Deposit be a bar or a defense to any action that Landlord may commence against
Tenant. In the event of any default by Tenant hereunder, Landlord shall have the
right, but shall not be obligated, to apply or retain all or any portion of the
Security Deposit in payment of Tenant's obligations hereunder, but any such
application or retention shall not have the effect of curing any such default.
Landlord shall hold any cash Security Deposit in a segregated account. The
Security Deposit (or the balance thereof remaining after payment out of the same
or deductions therefrom as provided above) shall be returned to Tenant no later
than sixty (60) days following expiration of the Term and the surrender of the
Premises to Landlord in the condition required hereunder. No interest shall be
payable with respect to any cash Security Deposit. Landlord or any owner of the
Premises may transfer or assign the Security Deposit to any new owner of the
Premises or to any assignee or transferee of this Lease or may credit the
Security Deposit against the purchase price of the Premises and upon such
transfer or credit all liability of the transferor or assignor of such security
shall cease and come to an end and Tenant shall look solely to such new owner,
assignee or transferee for the return of the Security Deposit. In the event
Guarantor's Net Worth exceeds One Hundred Million and 00/100 Dollars
($100,000,000) for two (2) consecutive quarters as evidenced by Guarantor's

                                      -8-
<PAGE>

financial statements to be furnished pursuant to the Tenant Guaranty and there
then exist no Events of Default or events which, with the delivery of notice or
the passage of time or both, would constitute Events of Default, but subject to
the continuing obligation of Tenant to furnish a Security Deposit if Guarantor's
Net Worth should at one or more times thereafter fall below the minimum amount
stated above, Landlord shall return to Tenant the Security Deposit. "Net Worth"
is defined as, as of any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in-capital and
retained earnings after deducting treasury stock, but excluding minority
interests in subsidiaries, if any) which would appear on the balance sheet of
Guarantor and wholly-owned subsidiaries which report on a consolidated basis
with Guarantor determined in accordance with generally accepted accounting
principles.

      Section 5.2. Landlord's Guaranty. As security for the performance of its
obligations under this Lease, Landlord, upon execution of this Lease, shall
furnish Tenant a Guaranty in the form of Exhibit D attached hereto (the
"Landlord Guaranty") from Temple-Inland Forest Products Corporation.

                                    ARTICLE 6

                                 USE OF PREMISES

      Section 6.1. Permitted Uses. Tenant shall use and occupy the Premises in
connection with operating a building or construction materials manufacturing
plant and general storage, office purposes and other uses related thereto and
for any other uses permitted by any and all applicable laws and regulations,
provided, however, Tenant must give Landlord prior written notice of any change
in use specifying in reasonable detail the nature of the changed use ("Permitted
Uses").

      Section 6.2. Prohibited Uses. Tenant shall not use or permit the Premises
to be used in any manner other than the Permitted Uses. Notwithstanding anything
contained herein to the contrary, Tenant shall not use or permit the Premises to
be used in any manner which would (i) be contrary to any statute, rule, order,
ordinance, requirement or regulation applicable to the Premises or Tenant's use
thereof including, but in no way limited to the Environmental Laws (as such term
is hereafter defined); (ii) violate any certificate of occupancy or building
permit affecting the Premises or any part thereof; (iii) cause material injury
to the Premises or any part thereof; (iv) constitute a public or private
nuisance or waste; (v) render the insurance on the Premises void or the
insurance risk more hazardous or create any defense to payment; (vi) cause or is
likely to cause material damage to the Premises or any equipment or the systems
in the Premises; or (vii) violate any covenant, condition or restriction of
record in any material respect (any such use is herein referred to as a
"Prohibited Use"). Tenant agrees that it will promptly, upon discovery of any
such Prohibited Use, take all necessary steps to compel the discontinuance of
such use. Landlord represents and warrants to Tenant that the Premises have not
been used for any Prohibited Use prior to the Term hereof by Landlord or, to
Landlord's knowledge, without inquiry, any other party. Landlord hereby
indemnifies and holds harmless Tenant for any Prohibited Use that occurred on
the Premises prior to, or that occurs thereon after, the Term hereof. The
foregoing indemnity shall survive the expiration or termination of this Lease.

      Section 6.3. Adverse Possession. Tenant shall not use, suffer or permit
the Premises or any material portion thereof to be used by Tenant, any third
party or the public, as such, without

                                      -9-
<PAGE>

restriction or in such manner as might reasonably tend to impair Landlord's
title to the Premises or any material portion thereof, or in such manner as
might reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or third persons, or of implied dedication of
the Premises or any material portion thereof or which might create the basis for
a claim for prescriptive easement or right of way on or through the Premises or
any material portion thereof by the public, as such, or any third party. Nothing
contained herein and no action or inaction by Landlord shall be deemed or
construed to mean that Landlord has granted to Tenant any right, power or
permission to do any act or make any agreement that may create, give rise to or
be the foundation for any such right, title, interest, lien, charge or other
encumbrance upon the estate of Landlord in the Premises.

      Section 6.4. Use of Parking Areas. Tenant shall have exclusive access and
control of the parking areas located on the Premises as of the date hereof for
use by Tenant and its officers, employees, agents, representatives, customers,
guests and invitees. Tenant shall not use any material part of the Premises in a
manner which will obstruct driveways serving parking areas for any material
period of time. Tenant shall not suffer or permit the storage of abandoned,
inoperable or unsightly vehicles in the parking areas for any material period of
time.

      Section 6.5. Compliance with Bond Documents. (a) Tenant agrees that it
will use the Bond-Financed Project in a manner that conforms to the
representations and complies with the covenants of Landlord as set forth in the
Loan Agreement dated as of May 1, 1998, relating to the Bonds (the "Loan
Agreement"), receipt of a copy of which Tenant hereby acknowledges. Moreover,
Tenant will permit, upon the prior written request Landlord or its agents,
Landlord or its agents to access the Premises at such reasonable times as may be
necessary in the reasonable opinion of the Landlord or its agents to inspect the
Bond-Financed Project to determine conformance with such representations and
compliance with such covenants and this Lease. Should Landlord or its agents
determine that the Bond-Financed Project fails to be used in a manner that
conforms to the representations or complies with the covenants, it promptly
shall provide written notice thereof to Tenant and, within sixty (60) days after
receipt thereof, Tenant shall commence correction of such failure. Tenant will
not dispose of any of the facilities comprising the Bond-Financed Project
without notice to, and consent of, Landlord. The obligations of Tenant under
this Section 6.5 shall apply only during such time as any of the Bonds are
outstanding.

      (b) Landlord covenants and agrees to redeem the Bonds in full on or before
January 2, 2001. Landlord represents and warrants to Tenant that it has
conformed to the representations and complied with the covenants of the Loan
Agreement as of the date hereof. Landlord hereby indemnifies and holds harmless
Tenant for Landlord's failure to comply with the covenants and conform to the
representations as set forth in the Loan Agreement described above or to redeem
the Bonds in full on or before January 2, 2001, including, without limitation,
any consequential damages that may arise from any such failure, which indemnity
shall survive the expiration or termination of this Lease.

      (c) In the event Landlord fails to redeem the Bonds in full on or before
January 2, 2001, Landlord shall be deemed to be in default hereunder and no cure
or grace paid shall be applicable thereto and Tenant shall have the right to
terminate this Lease by delivering written notice to Landlord on or before
January 20, 2001.

                                      -10-
<PAGE>

                                    ARTICLE 7

                             UTILITIES AND SERVICES

      Section 7.1. Utilities and Services. Gas, water and electricity shall not
be furnished by Landlord, but shall be furnished by utility companies serving
the area in which the Premises are located. Landlord shall permit Tenant to
receive such service directly from such utility companies at Tenant's cost,
shall permit Landlord's wire and conduits in the Premises, to the extent
available, suitable and safely capable, to be used for such purposes, and shall
cooperate with Tenant, at no material out-of-pocket expense to Landlord and
without encumbering the Premises, to the extent necessary to cause utility
services to be available to the Premises. Tenant shall make all necessary
arrangements with the utility company for metering (which metering costs shall
be borne solely by Tenant) and paying for services furnished by it to Tenant,
and Tenant shall pay for all charges for such utility services consumed on or
within the Premises during Tenant's occupancy thereof.

      Section 7.2. Failure to Furnish Utilities or Services. Tenant agrees that
Landlord and its agents shall not be liable for damages, or for any abatement of
Rent or otherwise, due to failure, delay or interruption of any utility
services. No such failure, delay or interruption shall ever be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from paying Rent or performing any of its obligations
under this Lease. Notwithstanding the foregoing, nothing contained herein shall
relieve Landlord of liability for actual damages incurred by Tenant to the
extent caused by the negligent conduct or willful misconduct of Landlord.

      Section 7.3. Regulations Regarding Utilities and Services. Tenant and
Landlord each agree to cooperate fully, at all times, with each other in abiding
by all reasonable regulations and requirements which either Landlord or Tenant
may reasonably prescribe for the proper functioning and protection of all
utilities and services reasonably necessary for the operation of the Premises,
provided, however, that, in connection with any such regulations and
requirements prescribed by Tenant, Tenant shall reimburse Landlord for all
material out-of-pocket expenses incurred by Landlord in connection therewith.

                                    ARTICLE 8

                         CONDITION AND CARE OF PREMISES

      Section 8.1. Condition of the Premises. No promises of Landlord to alter,
remodel, improve, repair, decorate or clean the Premises or any part thereof
have been made, and no representation respecting the condition of the Premises
or the Improvements or the Personal Property or any part thereof has been made
to Tenant by or on behalf of Landlord, except as expressly set forth herein.

      Section 8.2. Tenant Obligations. At its sole cost and expense throughout
the Term, Tenant shall (i) keep the Premises (including the Improvements) and
the Personal Property in good order and condition of repair and (ii) make and
perform all commercially reasonable maintenance thereof and all repairs thereto,
interior and exterior, ordinary and extraordinary, structural and
non-structural, foreseen and unforeseen, of every nature, kind and description,
except as otherwise expressly provided herein. When used in this Article 8,
"repairs" shall include all necessary replacements,

                                      -11-
<PAGE>

renewals, alterations, additions and betterments, whether capital or
non-capital, and regardless of whether the useful life thereof extends beyond
the Term. As to any repairs and replacements whatsoever, Tenant shall, in
connection therewith, comply with the requirements of Article 13 hereof as if
such work constituted an alteration. Tenant shall further keep and maintain the
improvements at any time situated upon the Premises, including, without
limitation, the parking areas, sidewalks, driveways, roadways, pathways, curbs,
loading areas and areas adjacent thereto, and all landscaped areas adjacent
thereto, reasonably safe, secure, clean and sanitary including, without
limitation, snow and ice clearance, planting and replacing flowers and
landscaping, and necessary interior painting. All repairs made by Tenant shall
be at least equal in quality to the work performed in constructing the
Improvements and the condition of the Premises and the Personal Property as of
the date hereof and shall be made by Tenant in accordance with all laws,
ordinances and regulations, whether heretofore or hereafter enacted. The
necessity for or adequacy of maintenance and repairs shall be measured by the
standards which are appropriate for improvements of similar construction and
class, provided that Tenant shall, in any event, make all repairs to the
Premises necessary to avoid any structural damage or other damage or injury to
the Premises or any part thereof.

      Section 8.3. Landlord Obligations. Landlord shall not be required to
furnish any services or facilities or to make any repairs or alterations in,
about, or to the Premises.

      Section 8.4. Compliance with Laws, Rules and Regulations. Tenant shall, at
its sole cost and expense, comply in all material respects with (i) all federal,
state, county, municipal and other governmental and quasi-governmental statutes,
laws, rules, orders, regulations and ordinances affecting the Premises or any
part thereof, or the use thereof, including those which require the making of
any unforeseen or extraordinary changes (the "Legal Requirements"), including,
but in no way limited to, the Environmental Laws, as such term is defined in
Article 27 hereof, and the Americans with Disabilities Act, as the same may be
amended from time to time (the "ADA"), whether or not any such statutes, laws,
rules, orders, regulations or ordinances which may be hereafter enacted involve
a change of policy on the part of the governmental body enacting the same, and
(ii) all rules, orders and regulations of the National Board of Fire
Underwriters or other bodies exercising similar functions in connection with the
prevention of fire or the correction of hazardous conditions (the "Fire
Underwriters Requirements"), which apply to the Premises. Tenant shall
materially comply with the requirement of all policies of liability, property
and other insurance which at any time may be in force with respect to the
Premises. In the event that the use by Tenant or any subtenant or assignee of
Tenant of the Premises results in the Premises constituting a "place of public
accommodation" for purposes of the ADA, Tenant shall give notice thereof to
Landlord and, to the extent that there are any signage requirements or additions
or deletions of, or improvements, or modifications to, any barriers to
accessibility, or other accommodations necessary for compliance with such law,
then Tenant shall be responsible for the cost of all such signage,
modifications, additions, deletions, improvements or accommodations. Tenant
acknowledges that any such requirements may require permanent replacements and
capital improvements to the Premises which (i) have expected useful lives
extending beyond the Term of this Lease and (ii) would otherwise be the
responsibility of Landlord. Any alterations to the Premises performed by Tenant
hereunder shall be subject to the terms of Article 13 regarding Tenant's right
to construct improvements on the Premises. Tenant agrees to indemnify, hold
harmless and defend Landlord from any claim, demand, damage, costs, assessment,
fee, penalty or any other charges or expense, including attorneys' fees, arising
out of or related to any failure or alleged failure by Tenant to fully comply
with any of its obligations under this Section 8.4. Tenant further acknowledges
and agrees that a failure by Tenant to comply with the terms hereof shall, with
the giving of the applicable

                                      -12-
<PAGE>

notice, constitute a default under Section 18.1 (e) hereof. Except as disclosed
to Tenant in writing, Landlord represents and warrants to Tenant that Landlord
has materially complied (as of the date hereof and for the period prior to the
Term) with all Legal Requirements, Environmental Laws, ADA, Fire Underwriters
Requirements, and all other laws and regulations which applied to the Premises
at the relevant time. Landlord agrees to indemnify, hold harmless and defend
Tenant from any claim, demand, damage, costs, assessment, fee, penalty or any
other charges or expense, including reasonable attorneys' fee, arising out of or
related to any failure or alleged failure by Landlord under the foregoing
representation and warranty, which indemnity shall survive the expiration or
termination of this Lease.

                                    ARTICLE 9

                               RETURN OF PREMISES

      Section 9.1. Surrender of Possession. At the termination of this Lease,
whether by lapse of time or otherwise, or upon termination of Tenant's right of
possession without termination of this Lease, Tenant shall surrender possession
of the Premises and the Personal Property to Landlord and deliver all keys to
the Premises to Landlord and make known to Landlord the combination of all locks
of vaults then remaining in the Premises. Tenant agrees and acknowledges that
Tenant shall return and surrender the Premises and the Personal Property and all
other equipment, improvements, personal property and fixtures of Landlord
therein to Landlord as aforesaid "broom-clean" and in as good condition as when
the construction of the Improvements is completed, ordinary wear and tear, age
and loss or damage by fire or other insured casualty, condemnation and damage
resulting from the negligence or willful misconduct of Landlord or its employees
and agents excepted, failing which, Landlord may restore the Premises and the
Personal Property and such other equipment and fixtures to such condition, and
Tenant shall pay the cost thereof to Landlord promptly upon demand. Except as
specifically set forth in this Lease, Tenant shall have no right or ability to
cancel or surrender this Lease or the Premises.

      Section 9.2. Installations and Additions. At the termination of this
Lease, all installations, additions, partitions, hardware, fixtures and
improvements, temporary or permanent, equipment and furniture placed in the
Premises by Tenant shall be and hereby remain Tenant's property. At Landlord's
request delivered at least six (6) months prior to the Expiration Date or as
soon as reasonably practicable in the event of an early termination of this
Lease, Tenant, at Tenant's sole cost and expense, shall remove such of the
installations, additions, partitions, hardware, fixtures and improvements,
equipment and furniture placed in the Premises by Tenant as are designated in
such notice and repair any material damage to the Premises caused by such
removal prior to the Expiration Date or, in the event of early termination of
this Lease, as soon as reasonably practicable, failing which Landlord may remove
the same and repair the Premises, and Tenant shall pay the cost thereof to
Landlord on demand. At the sole option of Landlord, Tenant shall leave in place
any floor covering without compensation to Tenant, or Tenant shall remove any
floor covering and shall remove all fastenings, paper, glue, bases or other
vestiges and restore the floor surface to its previous condition or shall pay to
Landlord upon demand the cost of restoring the floor surface to such condition.

      Section 9.3. Trade Fixtures and Personal Property. Tenant shall remove
Tenant's furniture, machinery, safes, trade fixtures, and other items of movable
personal property and equipment of

                                      -13-
<PAGE>

every kind and description from the Premises and restore any damage to the
Premises caused thereby, such removal and restoration to be performed prior to
the end of the Term or thirty (30) days following termination of this Lease or
Tenant's right of possession, whichever might be earlier. If Tenant fails to
remove such items, Landlord may do so and thereupon the provisions of Section
18.6 shall apply, and Tenant shall pay to Landlord upon demand the cost of
removal and of restoring the Premises.

      Section 9.4. Survival. All obligations of Tenant under this Article 9
shall survive the expiration of the Term or sooner termination of this Lease.

                                   ARTICLE 10

                                  HOLDING OVER

      Tenant shall have no right to occupy the Premises or any portion thereof
after the expiration or earlier termination of this Lease or of Tenant's right
to possession of the Premises. In the event Tenant or any party claiming by,
through or under Tenant retains possession of the Premises or any portion
thereof after the expiration or earlier termination of this Lease or of Tenant's
right to possession of the Premises, Landlord may exercise any and all remedies
available to it at law or in equity to recover possession of the Premises and
Tenant shall be liable for any costs, expense, damages (whether consequential or
direct) or liability Landlord suffers as a result of its holdover, including
under any lease with a successor tenant or under any contract with a contract
vendee. For each day Tenant or any party claiming by, through or under Tenant
retains possession of the Premises or any part thereof after the expiration or
earlier termination of this Lease or of Tenant's right to possession of the
Premises, Tenant shall pay Landlord an amount which is the sum of (i) the
greater of (A) the fair market rental value of the Premises determined at the
time of such holdover and (B) one hundred fifty percent (150%) of the Base Rent
due and payable at the time of such Lease termination or loss of right of
possession, pro-rated on a per diem basis, (ii) Impositions for the period in
which such holdover occurs, calculated as though such period were within the
Term, and pro-rated on a per diem basis, and (iii) all other Additional Rent due
for, or applicable to, the Term and any such holdover period. Acceptance by
Landlord of Rent after such termination shall not of itself constitute a
renewal. Nothing contained in this Section shall be construed or operate as a
waiver of Landlord's right of reentry or any other right or remedy of Landlord.

                                      -14-
<PAGE>

                                   ARTICLE 11

                             [INTENTIONALLY DELETED]

                                   ARTICLE 12

                           RIGHTS RESERVED TO LANDLORD

      Landlord reserves the following rights, exercisable with prior written
notice to Tenant as set forth below (except as otherwise provided herein) and
without effecting an eviction or disturbance of Tenant's use or possession or
giving rise to any claim for set off or abatement of Rent or affecting any of
Tenant's obligations under this Lease:

            (a) to exhibit the Premises with advance notice at reasonable hours
      to actual or prospective lenders, purchasers and, during the last six (6)
      months of the Term, to prospective lessees;

            (b) to decorate, remodel, repair, alter or otherwise prepare the
      Premises for re-occupancy at any time after Tenant abandons the Premises;

            (c) upon seven (7) days prior written notice to Tenant, which notice
      shall set forth the applicable reasonable purpose, to enter the Premises
      at reasonable hours for reasonable purposes; and

            (d) to enter upon the Premises at all reasonable times and upon
      reasonable prior written notice to Tenant (and without notice in the event
      of an emergency) to maintain, repair and/or make replacements to the
      Premises and the Personal Property necessary for the safety, protection or
      preservation thereof or of a material portion thereof or any person.

Landlord agrees to deliver and to cause its agents to deliver to Tenant an
executed Confidentiality Undertaking in the form of Exhibit E attached hereto
prior to any entry onto the Premises for the purposes described in clauses (c)
and (d) above, except that such Confidentiality Undertaking may be delivered as
soon as practicable in the event of any emergency under clause (d) above. Each
party hereto agrees to observe and not to interfere with the rights reserved to
the other party contained in this Lease.

                                   ARTICLE 13

                                   ALTERATIONS

      Tenant shall not, without prior written notice to Landlord, make any
alterations, additions or improvements to the Premises; provided that Tenant
shall not be required to furnish Landlord prior written notice of any
alterations that do not require the issuance of a building permit or similar
authorization from any governmental agency ("Non-Structural Alterations").
Before commencement of the work or delivery of any materials onto the Premises
requiring notice to Landlord, Tenant shall furnish to Landlord final plans and
specifications therefor, with any confidential information removed, but
including, without limitation, all plans and specifications

                                      -15-
<PAGE>

furnished to governmental agencies, and necessary permits and licenses. Landlord
shall, at Tenant's cost without delay, do all acts and sign all documents to
enable Tenant to obtain the necessary approvals and permits and to otherwise
enable Tenant to carry out those alterations, additions or improvements. All
alterations, additions and improvements shall be installed in a good,
workmanlike manner. All such work shall be done only by licensed contractors.
Tenant further agrees to indemnify, defend and hold Landlord harmless from any
and all liabilities of every kind and description which may arise out of or be
connected in any way with said alterations, additions or improvements
(including, without limitation, Non-Structural Alterations) and shall, at its
sole and exclusive expense, promptly pay all bills for such work and/or delivery
of goods in order to assure that no materialman and mechanic notices and/or
liens associated therewith are filed. Tenant shall pay the cost of all
alterations, additions and improvements and also the cost of restoring the
Premises occasioned by such alterations, additions and improvements, including,
without limitation, the cost of labor and materials, contractor's profit,
overhead and general conditions. Upon completing any alterations, additions or
improvements, Tenant shall furnish Landlord with contractors' affidavits, in
form required by law, and full and final waivers of lien and receipts and bills
covering all labor and materials expended and used. All alterations, additions
and improvements shall comply with all insurance requirements and with all city
and county ordinances and regulations, with the requirements of all state and
federal statutes and regulations and with the requirements of Section 8.4 above.
Within thirty (30) days after completion of any alterations, additions or
improvements for which notice to Landlord is required hereunder, Tenant shall
deliver to Landlord one (1) set of "as-built" plans for such alterations,
additions or improvements prepared by Tenant's engineer in reproducible form,
with any confidential information removed. Upon the expiration or earlier
termination of this Lease, Tenant shall transfer to Landlord all unexpired
warranties obtained by Tenant for work done in connection with the alterations,
additions or improvements.

                                   ARTICLE 14

                            ASSIGNMENT AND SUBLETTING

      Section 14.1. Assignment and Subletting. Tenant shall not, without the
prior written consent of Landlord, which shall not be unreasonably withheld,
conditioned or delayed, in each instance, (i) assign, transfer, license,
mortgage, pledge, hypothecate or in any way encumber, or subject to or permit to
exist upon or be subjected to any lien or charge, this Lease or any interest
herein; (ii) allow to exist or occur any transfer of or lien upon this Lease or
Tenant's interest herein by operation of law; (iii) sublet the Premises or any
part thereof; or (iv) permit the use or occupancy of the Premises or any part
thereof for any purpose other than Permitted Uses or by anyone other than Tenant
and Tenant's employees, officers, agents, representatives and invitees.
Notwithstanding anything to the contrary provided this Lease, Landlord expressly
consents to any assignment, license, sublease or transfer of this Lease or any
interest in Tenant to any Affiliate (as that term is hereinafter defined) of
Tenant or to any entity purchasing all or substantially all of the assets or
stock of Tenant (through purchase, merger or otherwise). "Affiliate" shall mean,
when used with reference to Tenant any other entity that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with Tenant. "Controlling" and any variations thereof shall mean
direct or indirect ownership of fifty percent (50%) or more of all of the voting
stock of a corporation or fifty percent (50%) or more of the voting legal or
equitable interest in any other business entity. In no event shall this Lease be
assigned or assignable by or as part of voluntary or involuntary

                                      -16-
<PAGE>

bankruptcy proceedings or otherwise, and in no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency or reorganization proceedings.

      Section 14.2. Rentals Based on Net Income. Without thereby limiting the
generality of the foregoing provisions of this Article 14, except as expressly
permitted by Section 14.1, Tenant expressly covenants and agrees not to enter
into any lease, sublease or license, concession or other agreement for use,
occupancy or utilization of the Premises which provides for rental or other
payment for such use, occupancy or utilization based in whole or in part on the
net income or profits derived by any person from the property leased, used,
occupied or utilized (other than an amount based on a fixed percentage or
percentages of receipts or sales), and that any such purported lease, sublease
or license, concession or other agreement shall be absolutely void and
ineffective as a conveyance of any right to or interest in the possession, use,
occupancy or utilization of any part of the Premises.

      Section 14.3. Tenant to Remain Obligated. Consent by Landlord to any
assignment, subletting, use, occupancy or transfer shall not operate to relieve
Tenant from any covenant or obligation hereunder, except to the extent, if any,
expressly provided for in such prior written consent, or be deemed to be a
consent to or relieve Tenant or any sublessee or assignee from obtaining
Landlord's consent to any subsequent assignment, transfer, lien, charge,
subletting, use or occupancy. Tenant shall pay all of Landlord's costs, charges
and expenses, including reasonable attorneys' fees, incurred in connection with
any assignment, transfer, lien, charge, subletting, use or occupancy made or
requested by Tenant, including, without limitation, reasonable costs and
expenses of attorneys employed in such assignment, subletting or other transfer
process.

      Section 14.4. Landlord's Consent. In accordance with Section 14.1 hereof,
Landlord, upon receiving Tenant's notice of proposed assignment or subletting
with respect to any portion of the Premises, will not unreasonably withhold,
delay, or condition its consent to Tenant's assignment of this Lease or
subletting the space covered by its notice. Landlord shall not be deemed to have
unreasonably withheld its consent to a sublease of all or part of the Premises
or an assignment of this Lease if its consent is withheld because (i) Tenant is
then subject to a notice of a material default from Landlord hereunder; (ii) any
notice of termination of this Lease or termination of Tenant's possession shall
have been given under Article 18 hereof; (iii) the portion of the Premises which
Tenant proposes to sublease, including the means of ingress to and egress from
and the proposed use thereof, and the remaining portion of the Premises will
violate or in any way conflict with any city, state or federal law, ordinance or
regulation, including, without limitation, any applicable building code or
zoning ordinances, or may require any retrofitting or substantial alteration or
modification of the Premises for purposes of compliance with any law, statute or
regulation, including, but not limited to, the Occupational Safety and Health
Act, the ADA or Environmental Laws; (iv) the proposed use of the Premises by the
subtenant or assignee is not a Permitted Use or in any way amounts to a
Prohibited Use; (v) in the good faith reasonable judgment of Landlord, the
proposed subtenant or assignee is of a character or is engaged in a business
which would be deleterious to the reputation of the Premises; or (vi) the
subtenant or assignee is not, in the good faith reasonable judgment of Landlord,
sufficiently financially responsible to perform its obligations under the
proposed sublease or assignment; provided, however, that the foregoing are
merely examples of reasons for which Landlord will withhold its consent and
shall not be deemed exclusive of any permitted reasons for withholding consent,
whether similar to or dissimilar from the foregoing examples.

                                      -17-
<PAGE>

      Section 14.5. Assignee to Assume Obligations. If Tenant shall assign this
Lease as permitted herein, the assignee shall expressly assume all of the
obligations of Tenant hereunder in a written instrument satisfactory to Landlord
and furnished to Landlord prior to the effective date of the assignment. If
Tenant shall sublease the Premises as permitted herein, Tenant shall obtain and
furnish to Landlord, prior to the effective date of such sublease and in form
satisfactory to Landlord, the written agreement of such subtenant stating that
(i) the subtenant will attorn to Landlord, at Landlord's option and written
request, in the event this Lease terminates before the expiration of the
sublease and (ii) Landlord may enforce the provisions of the sublease, including
the collection of rents. Any failure to comply with the requirements of this
Section 14.5 shall, without further act of any party to this Lease or related
assignment or sublease, terminate any such agreement, but in any event, Tenant's
obligations under this Lease shall remain in full force and effect.

      Section 14.6. Indirect Assignments. For purposes of this Article 14, the
following events shall be deemed an assignment or sublease, as appropriate: (i)
the issuance of equity interests (whether stock, partnership interests or
otherwise) in Tenant or any subtenant or assignee, or any entity Controlling any
of them, to any person or group of related persons (other than Affiliates of
Tenant), in a single transaction or a series of related or unrelated
transactions, such that, following such issuance, such person or group shall
have Control of Tenant or any subtenant or assignee; (ii) a transfer of Control
of Tenant or any subtenant or assignee in a single transaction or a series of
related or unrelated transactions (including, without limitation, by
consolidation, merger, acquisition or reorganization), except to an Affiliate of
Tenant and except that the transfer of outstanding capital stock or other listed
equity interests by persons or parties other than "insiders" within the meaning
of the Securities Exchange Act of 1934, as amended, through the
"over-the-counter" market or any recognized national or international securities
exchange, shall not be included in determining whether Control has been
transferred; provided, however, that the foregoing clauses (i) and (ii) shall
not include a sale of all or substantially all of the assets or stock of Tenant
to any Affiliate of Tenant, to which Landlord has consented under Section 14.1
above, or any restructuring of the ownership structure of Tenant and its
Affiliates which does not result in a change of Control thereof; or (iii) a
change or conversion in the form of entity of Tenant, any subtenant or assignee,
or any entity controlling any of them, which has the effect of reducing the
liability of any of the partners, members or other owners of such entity below
that which existed as of the Commencement Date.

                                   ARTICLE 15

                       WAIVER OF CERTAIN CLAIMS; INDEMNITY

      Section 15.1. Waiver of Certain Claims; Indemnity by Tenant. To the extent
not expressly prohibited by law, Tenant releases Landlord, and its partners,
members, shareholders, officers, directors, agents, servants and employees,
from, and waives all claims as against such persons for, damages to person or
property sustained by Tenant or by any occupant of the Premises or by any other
person, resulting directly or indirectly from fire or other casualty, or any
existing or future condition, defect, matter or thing in or about the Premises
or any part of it, or from any equipment or appurtenance therein, or from any
accident in or about the Premises, or from any act or neglect of any tenant or
other occupant of the Premises or any part thereof or of any other person,
including Landlord's agents and servants. This Section 15.1 shall apply
especially, but not exclusively, to damage caused by water, snow, frost, steam,
excessive heat or cold, sewage, gas, odors or noise, or the bursting or leaking
of pipes or plumbing fixtures, broken glass, sprinkling or air conditioning

                                      -18-
<PAGE>

devices or equipment, or flooding of basements, and shall apply whether the
damage was due to any of the acts specifically enumerated above or from any
other thing or circumstance, whether of a like nature or of a wholly different
nature. Further, in no event shall Landlord nor any partner, member,
shareholder, director, officer, agent, servant or employee of Landlord be liable
to Tenant or any of its subtenants or any occupant of the Premises or to any
other person for any indirect, consequential or punitive damages, including loss
of profits. Nothing contained in this Lease shall relieve Landlord of liability
for actual damages incurred by Tenant to the extent caused by the negligence or
willful misconduct of Landlord or its employees, officers or agents (other than
any liability that has been waived by Tenant pursuant to its waiver of
subrogation set forth in Section 22.1).

      Section 15.2. Damage Caused by Tenant's Negligence. Except for any claim
that has been waived by Landlord pursuant to its waiver of subrogation set forth
in Section 22.1, if any damage to the Premises, or any equipment or appurtenance
therein, whether belonging to Landlord or to other tenants or occupants of the
Premises or any other person, results from any act or negligence of Tenant, its
employees, agents, contractors, licensees or invitees, Tenant shall be liable
therefor and Landlord may, at its option, repair such damage and Tenant shall,
upon demand by Landlord, reimburse Landlord for all costs of repairing such
damage.

      Section 15.3. Tenant Responsible for Personal Property. All personal
property belonging to Tenant or any occupant of the Premises shall be the
responsibility of Tenant and Landlord shall have no obligation to maintain or
insure same.

      Section 15.4. Indemnification. To the extent not expressly prohibited by
law, except for any claim that has been waived by Landlord pursuant to its
waiver of subrogation set forth in Section 22.1, Tenant agrees to hold Landlord,
and its members, shareholders, partners, officers, directors, agents, servants
and employees, harmless and to defend and indemnify each of them against loss,
cost, damage, claims and liabilities, including, but without limitation,
reasonable attorneys' fees and costs of litigation, for injuries to all persons
and damage to or theft or misappropriation or loss of property occurring in or
about the Premises arising from (i) Tenant's occupancy of the Premises or the
conduct of its business, (ii) any activity, work or thing done or permitted by
Tenant in or about the Premises, (iii) any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part of Tenant to
be performed pursuant to the terms of this Lease, or (iv) any other act or
omission of Tenant, its officers, directors, owners, agents, contractors,
invitees, licensees, employees, sublessees, assignees, other persons
participating in or associated with the business of Tenant, or arising from any
other cause or source relating to or associated with Tenant. Tenant's obligation
to indemnify Landlord and the other parties indemnified hereunder shall include
the duty to defend against any claims asserted by reason of any such claims or
liabilities and to pay any judgments, settlements, costs, penalties,
assessments, fines, fees and expenses, including reasonable attorneys' fees,
incurred in connection therewith. To the extent not expressly prohibited by law,
except for any claim that has been waived by Tenant pursuant to its waiver of
subrogation set forth in Section 22.1, Landlord agrees to hold Tenant, and its
members, shareholders, partners, officers, directors, agents, servants and
employees, harmless and to defend and indemnify each of them against loss, cost,
damage, claims and liabilities, including, but without limitation, reasonable
attorneys' fees and costs of litigation, for injuries to all persons and damage
to or theft or misappropriation or loss of property occurring in or about the
Premises arising from (i) any breach or default on the part of Landlord in the
performance of any covenant or agreement on the part of Landlord to be performed
pursuant to the terms of this Lease, or (ii) any other act, omission or gross
negligence of Landlord, its officers, directors, owners, agents, contractors,
invitees, licensees,

                                      -19-
<PAGE>

employees, assignees, or other persons participating in or associated with the
business of Landlord. Landlord's obligation to indemnify Tenant and the other
parties indemnified hereunder shall include the duty to defend against any
claims asserted by reason of any such claims or liabilities and to pay any
judgments, settlements, costs, penalties, assessments, fines, fees and expenses,
including reasonable attorneys' fees, incurred in connection therewith.

      Section 15.5. Survival. All obligations and waivers of the parties under
this Article 15 shall survive the expiration of the Term or sooner termination
of this Lease.

                                   ARTICLE 16

                        DAMAGE OR DESTRUCTION BY CASUALTY

      If the Premises shall be damaged by fire or other casualty during the last
twenty-four (24) months of the Term and the cost of restoration is reasonably
estimated by Landlord to exceed One Million Dollars ($1,000,000), then Landlord
or Tenant shall have the right to terminate his Lease as of the date of such
casualty upon giving notice to the other within thirty (30) days after such
casualty; otherwise Tenant shall proceed to repair and restore the same with
reasonable promptness. Unless this Lease is terminated as provided in the
preceding sentence, Tenant shall proceed with reasonable promptness to repair
and restore the Premises, subject to zoning laws and building codes then in
effect. Except as expressly set forth herein, no destruction of or damage to the
Premises, or any portion thereof, by fire, casualty or otherwise, shall permit
Tenant to surrender this Lease or, shall relieve Tenant from its liability to
pay to Landlord the Rent payable under this Lease or from any of its other
obligations thereunder. In the event of termination of this Lease pursuant to
this Article 16, Rent shall be apportioned on a per diem basis and be paid to
the date of the fire or other casualty. Any damage or destruction to the
Premises which does not result in termination of this Lease shall not result in
the abatement of the Base Rent, Impositions and other Additional Rent payable
hereunder. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the Premises, damage to Tenant's personal
property or any inconvenience occasioned by any damage except (other than for
liability that has been waived by Tenant pursuant to its waiver of subrogation
set forth in Section 22.1) to the extent caused solely by Landlord's or its
agents', officers' or employees' gross negligence or willful misconduct.

                                   ARTICLE 17

                                 EMINENT DOMAIN

      If the entire Premises, or a substantial part thereof, or any part thereof
which includes all or a substantial part of the building(s) located thereon
shall be taken or condemned by any competent authority for any public or
quasi-public use or purpose, the Term of this Lease shall end upon and not
before the earlier of (i) the date when the possession of the part so taken
shall be required for such use or purpose or (ii) the effective date of the
taking and without apportionment of the award to or for the benefit of Tenant.
If any condemnation proceeding shall be instituted in which it is sought to take
or damage any part of the Premises, the taking of which would, in Landlord's or
Tenant's reasonable opinion, prevent the economical operation of the Premises,
and such taking or damage makes it necessary or desirable to remodel the
Premises to conform to the taking or damage, either Landlord or Tenant shall
have the right to terminate this Lease upon not less than ninety (90) days'

                                      -20-
<PAGE>

notice prior to the date of termination designated in such notice. In such
event, Rent shall be apportioned as of the date of the termination. No money or
other consideration shall be payable by Landlord or by Tenant for the right of
termination. If the Lease is not terminated as set forth above, then Tenant
shall proceed to repair and restore the same with reasonable promptness, subject
to zoning laws and building codes then in effect. No condemnation or taking of
any portion of the Premises which does not result in termination of this Lease
shall permit Tenant to surrender this Lease or shall relieve Tenant from its
liability to pay to Landlord the Rent payable under this Lease or from any of
its other obligations hereunder, provided, however, that, if such condemnation
or taking includes any portion of the building located on the Premises, Base
Rent shall be reduced in proportion to the reduction, if any, of the rentable
area thereof as reasonably determined by Landlord. Landlord shall be entitled to
all of the condemnation award for the Premises, provided that if such a claim
will not reduce the condemnation award to Landlord in any way, Tenant shall be
entitled to make a claim against the condemning authority for loss or damage to
Tenant's trade fixtures, equipment, machinery and removable personal property,
and, if this Lease is terminated as set forth above, for actual, out-of-pocket
costs incurred in relocating, but not for the value of the leasehold estate, and
provided further that if the Lease is not terminated as set forth above,
Landlord shall make the condemnation proceeds allocable to the taking of any
improvements on the Premises available to Tenant for the restoration thereof.

                                   ARTICLE 18

                                EVENT OF DEFAULT

      Section 18.1. Events of Default. The occurrence of any one or more of the
following matters constitutes a default (an "Event of Default") by Tenant under
this Lease after the expiration of any applicable notice and cure periods:

            (a) failure by Tenant to pay any Base Rent after the due date
      thereof for a period of ten (10) days after written notice to Tenant;

            (b) failure by Tenant to pay, within thirty (30) days after written
      notice of failure to pay on the due date from Landlord to Tenant, any
      other moneys required to be paid by Tenant under this Lease including, but
      not limited to, Impositions and Additional Rent;

            (c) Tenant's assignment of this Lease or sublease of the Premises or
      any portion thereof in violation of Article 14;

            (d) failure by Tenant to immediately commence to cure upon receipt
      of written notice from Landlord, and to continuously prosecute said cure
      to completion within thirty (30) days after receipt of such notice, any
      hazardous condition which Tenant has created in violation of law or of
      this Lease (or such longer period, not to exceed ninety (90) days in the
      aggregate, as is necessary so long as Tenant commences to cure such
      default within said thirty (30) day period and diligently and continuously
      prosecutes said cure to completion within said ninety (90) days);

            (e) failure by Tenant to observe or perform any other covenant,
      agreement, condition or provision of this Lease, if such failure shall
      continue for thirty (30) days after

                                      -21-
<PAGE>

      written notice thereof from Landlord to Tenant (or such longer period, not
      to exceed ninety (90) days in the aggregate, as is necessary so long as
      Tenant commences to cure such default within said thirty (30) day period
      and diligently and continuously prosecutes said cure to completion within
      said ninety (90) days);

            (f) the levy upon under writ of execution or the attachment by legal
      process of the leasehold interest of Tenant, or the filing or creation of
      a lien with respect to such leasehold interest, which writ, attachment or
      lien shall not be bonded-over, released or discharged within thirty (30)
      days from the date of such levy, attachment, filing or creation;

            (g) Tenant becomes insolvent or bankrupt, or admits in writing its
      inability to pay its debts as they mature, or makes an assignment for the
      benefit of creditors with respect to a material part of its assets, or
      applies for or consents to the appointment of a trustee or receiver for
      Tenant or for a substantial part of its assets;

            (h) a trustee or receiver is appointed for Tenant or for a
      substantial part of its assets and is not discharged within ninety (90)
      days after such appointment; or

            (i) bankruptcy, reorganization, arrangement, insolvency or
      liquidation proceedings, or other proceedings/or relief under any
      bankruptcy law or similar law for the relief of debtors, are instituted
      (i) by Tenant or (ii) against Tenant and are allowed against it or are
      consented to by it or are not dismissed within ninety (90) days after such
      institution.

      Section 18.2. Rights and Remedies of Landlord. If an Event of Default
occurs, and subject to its duty to use commercially reasonable efforts to
mitigate its damages, Landlord shall have the rights and remedies hereinafter
set forth, which shall be distinct, separate and cumulative and shall not
operate to exclude or deprive Landlord of any other right or remedy allowed it
by law or in equity and the decision by Landlord to pursue any one or more of
such remedies shall not be treated as an election to only pursue any such
remedies to the exclusion of any others:

            (a) Landlord may terminate this Lease by giving to Tenant notice of
      Landlord's election to do so, in which event the Term shall end and all
      right, title and interest of Tenant hereunder shall expire on the date
      stated in such notice;

            (b) Landlord may terminate the right of Tenant to possession of the
      Premises without terminating this Lease by giving notice to Tenant that
      Tenant's right of possession shall end on the date stated in such notice,
      whereupon the right of Tenant to possession of the Premises or any part
      thereof shall cease on the date stated in such notice; and

            (c) Landlord may enforce the provisions of this Lease and may
      enforce and protect the rights of Landlord hereunder by a suit or suits in
      equity or at law for the specific performance of any covenant or agreement
      contained herein, or for the enforcement of any other appropriate legal or
      equitable remedy, including recovery of all moneys due or to become due
      from Tenant under any of the provisions of this Lease.

      Section 18.3. Right to Re-Enter. If Landlord exercises either of the
remedies provided for in subsections (a) and (b) of the foregoing Section 18.2,
Tenant shall surrender possession and vacate the Premises and immediately
deliver possession thereof to Landlord, and Landlord may by

                                      -22-
<PAGE>

employing lawful means re-enter and take complete and peaceful possession of the
Premises, with process of law, full and complete license so to do being hereby
granted to Landlord, and Landlord may remove all occupants and property
therefrom, without being deemed in any manner guilty of trespass, eviction or
forcible entry and detainer and without relinquishing Landlord's right to Rent
or any other right given to Landlord hereunder or by operation of law. In
conjunction with any such re-entry by lawful means Landlord shall, in the event
that there are any subtenants occupying or having rights in and to the Premises,
be entitled to either terminate any such subtenancies or assume Tenant's rights
thereunder, provided, however, that no such assumption shall, unless otherwise
expressly agreed to by Landlord, obligate Landlord to perform or fulfill
Tenant's obligations thereunder.

      Section 18.4. Periodic Damages. If Landlord terminates the right of Tenant
to possession of the Premises without terminating this Lease, Landlord may, at
its election, proceed under this Section or under Section 18.5. Under this
Section, Landlord shall have the right to immediate recovery of all amounts then
due hereunder. Such termination of possession shall not release Tenant, in whole
or in part, from Tenant's obligation to pay any amounts due Landlord hereunder
for the full Term, and Landlord shall have the right, from time to time, to
recover from Tenant, and Tenant shall remain liable for, all Base Rent,
Additional Rent, including Impositions, and any other sums accruing as they
become due under this Lease during the period from the date of such notice of
termination of possession to the stated end of the Term. In any such case,
Landlord shall use commercially reasonable efforts to relet the Premises or any
part thereof for the account of Tenant for such rent, for such time (which may
be for a term extending beyond the Term) and upon such terms as shall be
marketably reasonable, provided, however, Landlord (i) may show or lease any
other available space and Landlord shall incur no liability to Tenant for
preferentially showing or leasing such other space; (ii) shall not be obligated
to lease the Premises to any replacement tenant that does not, in Landlord's
reasonable opinion, have (A) sufficient financial resources, (B) operating
experience or (C) good reputation in the business community; (iii) shall not be
obligated to lease the Premises to any replacement tenant where the replacement
tenant's use of the Premises would violate any Mortgage, covenant, condition or
restriction of record; and (iv) shall not be obligated to lease the Premises for
any rental below the fair market rental for the Waxahachie area (except if
applicable law requires Landlord to relet the Premises or collect such rent upon
reletting and Landlord fails to do so). Landlord shall not be required to accept
any tenant offered by Tenant or to observe any instructions given by Tenant
relative to such reletting. Also, in any such case, Landlord may make repairs,
alterations and additions in or to the Premises and redecorate the same to the
extent reasonably deemed by Landlord necessary or desirable and, in connection
therewith, change the locks to the Premises, and Tenant shall upon demand pay
the cost of all the foregoing together with Landlord's expenses of reletting.
The rents from any such reletting shall be applied first to the payment of the
expenses of reconditioning the Premises to a condition suitable for leasing such
Premises, reentry, redecoration, repair and alterations and the expenses of
reletting (including any brokerage fees or commissions), and second to the
payment of Additional Rent then due from Tenant, and third to the payment of
Base Rent herein provided to be paid by Tenant. Any excess or residue shall
operate only as an offsetting credit against the amount of Base Rent and
Additional Rent, including Impositions, due and owing or which thereafter may
become due and owing as the same thereafter becomes due and payable hereunder,
and the use of such offsetting credit to reduce the amount of Base Rent and
Additional Rent, including Impositions, if any, shall not be deemed to give
Tenant any right, title or interest in or to such excess or residue, and any
such excess or residue shall belong to Landlord solely, and in no event shall
Tenant be entitled to a credit on its indebtedness to or on behalf of Landlord
in excess of the aggregate sum (including Base Rent,

                                      -23-
<PAGE>

Additional Rent and Impositions) which would have been paid by Tenant to the
stated end of the Term, had no Event of Default occurred. No such reentry or
repossession, repairs, alterations and additions or reletting shall be construed
as an eviction or ouster of Tenant or as an election on Landlord's part to
terminate this Lease, unless a written notice of such intention shall be given
to Tenant, nor shall it operate to release Tenant in whole or in part from any
of Tenant's obligations hereunder, and Landlord may, at any time and from time
to time, sue and recover judgment for any deficiencies from time to time
remaining after the application from time to time of the proceeds of any such
reletting.

      Section 18.5. Liquidated and Associated Damages. If this Lease is
terminated by Landlord as provided for by subsection (a) of Section 18.2, or if
Landlord does not terminate the Lease, but elects to proceed under this Section
instead of Section 18.4, Landlord shall be entitled to recover from Tenant all
Base Rent and Additional Rent, including Impositions, as estimated by Landlord,
accrued and unpaid for the period up to and including such termination date or
election date, as applicable (such applicable termination or election date
hereafter "Calculation Date"), as well as all other additional sums payable by
Tenant or for which Tenant is liable or in respect of which Tenant has agreed to
indemnify Landlord under any of the provisions of this Lease, which may be then
owing and unpaid, and all costs, assessments, fines, fees and expenses,
including court costs and reasonable attorneys' fees, incurred by Landlord in
the enforcement of its rights and remedies hereunder, and, in addition, Landlord
shall be entitled to recover as damages for loss of the bargain and not as a
penalty: (i) the aggregate sum which at the time of such termination or election
represents the excess, if any, of the present value of the aggregate Rents which
would have been otherwise payable under this Lease after the Calculation Date
(including, without limitation, Base Rent at the annual rate or respective
annual rates for the remainder of the Term and the amount reasonably projected
by Landlord to represent Additional Rent for the remainder of the Term) over the
then-present value of the then-aggregate fair rental value of the Premises for
the balance of the Term remaining after the Calculation Date, such present worth
to be computed in each case on the basis of an eight percent (8%) per annum
discount from the respective dates upon which such rentals or other amounts
would have been otherwise payable under this Lease; and (ii) any damages in
addition thereto, including reasonable attorneys' fees and court costs, which
Landlord shall have sustained by reason of the breach of any of the covenants of
this Lease other than for the payment of Rent. For purposes of calculating
damages for the loss of bargain under this Section, such calculation will, for
purposes of calculating the fair rental value offset, take into account the
estimated average period of time necessary for Landlord to locate an acceptable
tenant and negotiate and complete a lease with such replacement tenant. The
parties hereto agree that such period of time shall be conclusively deemed to be
six (6) calendar months from the Calculation Date, and, therefore, there shall
be no amount attributable to fair rental value of the Premises to be offset
against amounts otherwise due under the Lease for the initial six (6) month
period after the Calculation Date.

      Section 18.6. Storage, Removal and Sale of Personal Property. All property
of Tenant which is stored by Landlord or removed from the Premises by Landlord
pursuant to any provisions of this Lease may be handled, removed or stored by
Landlord at the cost and expense of Tenant and Landlord shall in no event be
responsible for the value, preservation or safekeeping thereof. Tenant shall pay
Landlord for all expenses incurred by Landlord in such removal and storage and
all reasonable charges requested by Landlord for any storage of such property,
so long as the same shall be in Landlord's possession or under Landlord's
control. All such property not removed from the Premises or retaken from storage
by Tenant within sixty (60) days after the end of the Term, however terminated,
shall, at Landlord' s option, either (i) be conclusively deemed to have been

                                      -24-
<PAGE>

conveyed by Tenant to Landlord as by bill of sale without further payment or
credit by Landlord to Tenant, or (ii) sold by Landlord in accordance with Texas
statutory law whereby all costs and expenses incurred by Landlord in such sale
will be added to any amounts owed Landlord.

      Section 18.7. Attorneys' Fees. Tenant shall pay all of Landlord's
reasonable costs, charges and expenses, including court costs and reasonable
attorneys' fees, incurred by Landlord in any action brought by Landlord or
against Landlord in which Landlord is the prevailing party, or incurred by
Landlord in any litigation, negotiation or transaction in which Tenant causes
Landlord, without its fault, to become involved or concerned. Nothing in this
Section 18.7 shall interfere with Landlord's rights and remedies against Tenant
and/or any guarantors of this Lease to receive the benefit of Tenant's
agreements to defend and/or indemnify Landlord as variously set forth herein.
Attorneys' fees available to Landlord hereunder may include, without limitation,
all fees and costs incurred by Landlord in filing a claim or otherwise
requesting relief or appearing in or with respect to bankruptcy or insolvency
proceedings involving Tenant, any guarantor of this Lease or any successor to or
assign of either such party. In this Section 18.7, the term "prevailing party"
shall include, without limitation, a party who substantially obtains or defeats
the relief sought, as the case may be, whether by compromise, settlement,
judgment or the abandonment by the other party of its claim or defense and shall
also include a party filing a claim or otherwise requesting relief in bankruptcy
or insolvency proceedings involving the other party to this Lease. The
attorneys' fees and costs awarded shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and costs reasonably incurred. Tenant shall also have all such rights against
Landlord that are provided to Landlord in this Section 18.7 upon Landlord's
default.

      Section 18.8. [Intentionally Deleted].

      Section 18.9. Landlord Default. In the event that Landlord is in default
of any agreement, representation, warranty, or indemnification obligation
provided herein, Landlord shall have thirty (30) days after notice thereof to
cure same (or if such default cannot be cured within that 30 day period, then
Landlord shall have such additional time (not to exceed 90 days) as may be
reasonably necessary if Landlord has commenced within such 30 days and is
diligently pursuing in good faith to cure such default). Subject to and without
limitation of Section 29.17 below and Tenant's rights thereunder, Tenant shall
have no, and hereby expressly disclaims and waives any, right to cancel or
terminate this Lease in the event of any non-performance or default of Landlord,
subject to the cure period set forth above, Tenant's rights being hereby
expressly limited to an action for damages, specific performance or other
equitable remedies.

                                   ARTICLE 19

                                  SUBORDINATION

      Section 19.1. Subordination. Landlord may hereafter from time to time
execute and deliver one or more mortgages or trust deeds in the nature of a
mortgage (collectively or singularly, a "Mortgage" or "Mortgages," the Mortgage
with priority over any other Mortgages from time to time being herein referred
to as the "First Mortgage") against the Premises or any interest therein.
Landlord represents, warrants and covenants that Tenant's leasehold estate is
and will remain either senior to all Mortgages presently existing or hereafter
placed against the Premises or any part thereof

                                      -25-

<PAGE>

or will be subject to a mutual recognition and attornment agreement reasonably
acceptable to Tenant. Tenant will promptly, but in no event later than twenty
(20) days after receipt thereof, execute and deliver such agreement or
agreements. Tenant covenants it will not subordinate this Lease to any Mortgage
other than a First Mortgage without the prior written consent of the holder of
the First Mortgage. Landlord represents and warrants to Tenant that to
Landlord's knowledge, without inquiry, there are no liens filed, incurred,
affecting or relating to the Premises.

      Section 19.2. Liability of Holder of Mortgage; Attornment. It is further
agreed that (i) if any Mortgage shall be foreclosed, (A) the holder of the
Mortgage, ground lessor (or their respective grantees) or purchaser at any
foreclosure sale (or grantee in a deed in lieu of foreclosure), as the case may
be, shall not be (1) liable for any act or omission of any prior landlord
(including Landlord), (2) subject to any offsets or counterclaims which Tenant
may have against a prior landlord (including Landlord), or (3) bound by any
prepayment of Base Rent, Additional Rent or Impositions which Tenant may have
made in excess of the amounts then due for the next succeeding quarter; (B) the
liability of the mortgagee or trustee hereunder or the purchaser at such
foreclosure sale under this Lease or the liability of a subsequent owner
designated as landlord under this Lease shall exist only so long as such
trustee, mortgagee, purchaser or owner is the owner of the Premises, and such
liability shall not continue or survive after further transfer of ownership
except for such matters that arose during ownership; and (C) Tenant will attorn,
as Tenant under this Lease, to the purchaser at any foreclosure sale under any
Mortgage, and Tenant will promptly, but in no event later than twenty (20) days
after receipt thereof, execute such instruments as may be necessary or
appropriate to evidence such attornment, provided such instruments also contain
a provision recognizing Tenant's tenancy and agreeing that Tenant's quiet
possession shall not be disturbed if Tenant has not committed an Event of
Default; and (ii) this Lease may not be modified or amended so as to reduce the
Rent or shorten the Term or so as to adversely affect in any other respect to
any material extent the rights of Landlord, nor shall this Lease be canceled or
surrendered, without the prior written consent of the holder of any Mortgage and
any ground lessor.

      Section 19.3. Short Form Lease. Prior to the Commencement Date, Landlord
and Tenant shall execute a memorandum of lease for recording (containing the
names of the parties, a description of the Premises, the Term of this Lease and
all options) in such form as may be mutually acceptable, and shall record such
memorandum with the real property records of the county in which the Premises
are located. Landlord and Tenant agree to execute a recordable release of said
memorandum of lease upon expiration or termination of this Lease.

                                   ARTICLE 20

                              MORTGAGEE PROTECTION

      Tenant agrees to give any ground lessor or any holder of any Mortgage
against the Premises, or any interest therein, by registered or certified mail,
a copy of any notice or claim of default served upon Landlord by Tenant,
provided that prior to such notice Tenant has been notified in writing (by way
of service on Tenant of a copy of an assignment of Landlord's interests in
leases, or otherwise) of the name and address of such ground lessor or Mortgage
holder. Tenant further agrees that if Landlord shall have failed to cure such
default within thirty (30) days after such notice to Landlord (or if such
default cannot be cured or corrected within that time, then such additional time
not to exceed ninety (90) days as may be necessary if Landlord has commenced
within such thirty (30)

                                      -26-

<PAGE>

days and is diligently pursuing the remedies or steps necessary to cure or
correct such default), then the ground lessor or holder of the Mortgage shall
have an additional thirty (30) days within which to cure or correct such default
(or if such default cannot be cured or corrected within that time, then such
additional time as may be necessary if such ground lessor or holder of the
Mortgage has commenced within such thirty (30) days and is diligently pursuing
the remedies or steps necessary to cure or correct such default, including the
time necessary to obtain possession if possession is necessary to cure or
correct such default).

                                   ARTICLE 21

                              ESTOPPEL CERTIFICATE

      Each party hereto agrees that, from time to time upon not less than ten
(10) days prior written request by the other or the holder of any Mortgage or
any ground lessor, it (or any permitted assignee, subtenant, licensee,
concessionaire or other occupant of the Premises claiming by, through or under
Tenant) will deliver to the party making the written request, a statement in
writing signed by such party certifying certain terms, conditions and status of
the relationship between Landlord and Tenant arising out of this Lease
including, but in no way limited to: (i) that this Lease is unmodified and in
full force and effect (or if there have been modifications, that this Lease as
modified is in full force and effect and identifying the modifications); (ii)
the date upon which Tenant began paying Rent and the dates to which the Rent and
other charges have been paid; (iii) that such responding party is not in default
under this Lease, or, if in default the nature thereof in detail and, to its
best actual knowledge, the other party is not in default hereunder or, if in
default, the nature thereof in detail; (iv) that Tenant is in occupancy of the
Premises and paying all Base Rent and Additional Rent, including all
Impositions, on a current basis with no rental offsets or claims; (v) that there
has been no prepayment of Base Rent other than that provided for in this Lease;
(vi) that there are no actions, whether voluntary or otherwise, pending against
such party under the bankruptcy laws of the United States; (vii) that except as
specifically set forth in this Lease, there are no options or rights regarding
renewal of this Lease, acquisition of the Premises or any portion thereof,
expansion or diminution of the Premises or other rights or options similar to
the foregoing; and (viii) such other matters as may be reasonably required by
the party making the written request for such estoppel.

                                   ARTICLE 22

                            SUBROGATION AND INSURANCE

      Section 22.1. Waiver of Subrogation. Landlord and Tenant agree to have all
property damage insurance which may be carried by either of them endorsed with a
clause providing that any release from liability of, or waiver of claim for
recovery from, the other party entered into in writing by the insured thereunder
prior to any loss or damage shall not affect the validity of said policy or the
right of the insured to recover thereunder, and providing further that the
insurer waives all rights of subrogation which such insurer might have against
the other party. Without limiting any release or waiver of liability or recovery
set forth elsewhere in this Lease, and notwithstanding anything in this Lease
which may appear to be to the contrary, each of the parties hereto waives all
claims for recovery from the other party for any loss or damage to any of its
property payable under insurance policies required by this Lease to be
maintained by the party providing this waiver, regardless of whether the damage
or loss was caused by the negligence of the party granting such waiver.

                                      -27-

<PAGE>

Notwithstanding the foregoing or anything contained in this Lease to the
contrary, any release or any waiver of claims shall not be operative, nor shall
the foregoing endorsements be required, in any case where the effect of such
release or waiver is to invalidate insurance coverage or invalidate the right of
the insured to recover thereunder or to increase the cost thereof (provided that
in the case of increased cost the other party shall have the right, within ten
(10) days following written notice, to pay such increased cost keeping such
release or waiver in full force and effect).

      Section 22.2. Tenant's Insurance. Tenant shall procure and maintain
policies of insurance, at its sole cost and expense, during the Term with the
following coverages:

            (a) Commercial general liability insurance written on a per
      occurrence basis covering all claims, demands or actions made by, or on
      behalf of, any person or persons, firm or corporation and arising from,
      related to or connected with the Premises, Tenant's use and occupancy and
      the conduct of its business therein for injury to or death of any person
      and for damage to property in an amount of not less than One Million
      Dollars ($1,000,000), combined single limit, which coverage shall be
      primary and non-contributory, and umbrella or excess liability coverage of
      not less than Ten Million Dollars ($10,000,000) in excess over and above
      primary coverage. Tenant's insurance will include products and completed
      operations liability.

            (b) Insurance against loss or damage from external explosion or
      breakdown of boilers, air conditioning equipment and miscellaneous
      electrical apparatus, if any, in the Premises, in an amount not less than
      One Million Dollars ($1,000,000), with loss or damage payable to Landlord
      and Tenant as their interests may appear.

            (c) Insurance against all worker's compensation claims in statutory
      amounts and employer's liability coverage with minimum limits of One
      Million Dollars ($1,000,000) bodily injury by accident, One Million
      Dollars ($1,000,000) bodily injury by disease and One Million Dollars ($
      1,000,000) bodily injury per each employee.

            (d) Business interruption insurance covering Tenant for a period of
      twelve (12) months.

            (e) All leasehold improvements, contents (including, without
      limitation, the Surplus Equipment and the Personal Property) and Tenant's
      trade fixtures, machinery, equipment, furniture and furnishings, in the
      Premises to the extent of one hundred percent (100%) of their replacement
      cost (subject to reasonable and customary deductibles) against loss or
      damage by fire, lightning, wind storm, aircraft, vehicles, smoke,
      explosion, riot or civil commotion, flood and earthquake as provided by
      all risk insurance, including coverage for vandalism and malicious
      mischief and sprinkler leakage.

            (f) If Tenant operates owned, leased or non-owned vehicles on the
      Premises, comprehensive automobile liability insurance with a minimum
      coverage of One Million Dollars ($1,000,000) per occurrence.

            (g) "All risks" property and casualty insurance covering the
      Premises and all improvements located thereon for the benefit of Landlord,
      its managing agents and mortgagees, as their respective interests may
      appear, as the named insureds, against (i) loss or

                                      -28-

<PAGE>

      damage by fire; (ii) loss or damage from such other risks or hazards now
      or hereafter embraced by an "all risks" policy, including, but not limited
      to, windstorm, hail, explosion, vandalism, riot and civil commotion,
      damage from vehicles, smoke damage, water damage and debris removal; (iii)
      loss from so-called explosion, collapse and underground hazards; and (iv)
      loss or damage from such other risks or hazards of a similar or dissimilar
      nature which are not or may hereafter be customarily insured against with
      respect to improvements similar in construction, design, general location,
      use and occupancy to the improvements located on the Premises. At all
      times, such insurance coverage shall be in an amount equal to one hundred
      percent (100%) of the then "Full Replacement Cost" of such improvements
      (subject to reasonable and customary deductibles). Full Replacement Cost
      shall be interpreted to mean the cost of replacing all such improvements
      without deduction for depreciation or wear and tear, and it shall include
      a reasonable sum of architectural, engineering, legal, administrative and
      supervisory fees in connection with the restoration or replacement thereof
      in the event of damage thereto or destruction thereof. If a sprinkler
      system shall be located in the Premises, sprinkler leakage insurance in
      form and amount reasonably satisfactory to Landlord shall be procured and
      continuously maintained by Tenant at Tenant's sole cost and expense.

            (h) Such other types of insurance or endorsements to the aforesaid
      insurance as may be required of tenants whose use and credit is comparable
      to that of Tenant by owners leasing space of a size comparable to the
      Premises for a use similar to Tenant's use.

Landlord may from time to time increase the insurance coverage limits to be
maintained by Tenant under this Section 22.2 as Landlord reasonably deems
necessary in order to maintain adequate coverage; provided, that Landlord may
not increase such insurance coverage limits to amounts greater than limits
comparable to limits then customarily required of tenants leasing space of a
size comparable to the Premises for a use similar to Tenant's use. In the event
that Tenant elects to self-insure or obtain self-insured retentions in lieu of
the foregoing, Tenant will notify Landlord in writing of same, together with
information setting forth the limits of such self-insurance or self-insured
retentions (as same apply to this Lease), the excess coverage that Tenant
proposes to carry, Tenant's financial capacity to undertake and support such
self-insurance or self-insured retentions and Tenant's risk management program,
all of which shall be subject to Landlord's reasonable approval. Tenant agrees
to furnish Landlord at least annually updated information as set forth above if
there has been any material adverse change thereto.

      Section 22.3. Evidence of Insurance. Prior to the commencement of the
Term, Tenant shall furnish to Landlord insurance policies and certificates of
insurance evidencing the insurance coverage required by this Lease. Such
policies shall state that such insurance coverage may not be materially amended
or canceled or not renewed without at least thirty (30) days' prior written
notice to Landlord in accordance with Article 26, Tenant and the holder of any
Mortgages whose names and addresses have been furnished to Tenant. Such
insurance shall be in form reasonably satisfactory to Landlord and the holders
of any Mortgages, provide for deductibles reasonably satisfactory to the holders
of any Mortgages and be issued by financially sound insurance companies
reasonably acceptable to Landlord licensed to do business in the State of Texas
and maintaining a rating of A+/XI or better in Best's Insurance
Reports-Property-Casualty (or an equivalent rating in any successor index
adopted by Best's or its successor). Certificates of insurance evidencing all
renewal and substitute policies of insurance shall be delivered to Landlord and
the holders of any

                                      -29-

<PAGE>

Mortgages whose names and addresses have been furnished to Tenant at least
fifteen (15) days before termination of the policies being renewed or
substituted.

      Landlord and any property manager, any ground lessor and the holders of
any Mortgages shall be named as principals under each policy of insurance
maintained by Tenant pursuant to Sections 22.2(a) and (f). The policies of
insurance required to be maintained by Tenant shall provide that the coverage
thereunder shall be primary, and that any coverage carried by Landlord shall be
secondary and noncontributory with respect to Tenant's policy.

      Tenant shall not, on Tenant's own initiative or pursuant to request or
requirement of any third party, take out separate insurance concurrent in form
or contributing in the event of loss with the insurance required in this Lease
unless the parties required by this Article 22 to be named as additional
insureds or loss payees thereunder are so named. Tenant shall immediately notify
Landlord in writing whenever any such separate insurance is taken out. All such
policies of insurance that Tenant is obligated to obtain and maintain shall
provide that any loss shall be payable to Landlord notwithstanding any act or
omission of Tenant which might otherwise result in a forfeiture or reduction of
such insurance.

      Section 22.4. Compliance with Requirements. Tenant's use shall comply with
all applicable laws and ordinances, all orders and decrees of court and all
requirements of other governmental authorities, and shall not, directly or
indirectly, make any use of the Premises which may thereby be prohibited or be
dangerous to person or property, or which may jeopardize any insurance coverage
or increase the cost of such insurance or require additional insurance coverage.

      Section 22.5. Proceeds of Certain Insurance. All policies of insurance
required by Sections 22.2(b) and (g) shall provide that the proceeds thereof
shall be payable to Landlord, and if Landlord so requests, shall also be payable
to any contract purchaser of the Premises and any First Mortgagee, as the
interest of such purchaser or Mortgagee appears, pursuant to a standard named
insured or mortgagee clause.

                                   ARTICLE 23

                                    NONWAIVER

      No waiver of any condition expressed in this Lease shall be implied by any
neglect of Landlord to enforce any remedy on account of the violation of such
condition, whether or not such violation be continued or repeated subsequently,
and no express waiver shall affect any condition other than the one specified in
such waiver and that one only for the time and in the manner specifically
stated. Without limiting Landlord's rights under Article 10, no receipt of
moneys by Landlord from Tenant after the termination in any way of the Term or
of Tenant's right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Term or affect any notice given to
Tenant prior to the receipt of such moneys. After the service of notice or the
commencement of a suit or after final judgment for possession of the Premises,
Landlord may receive and collect any moneys due, and the payment of said moneys
shall not waive or affect said notice, suit or judgment.

                                      -30-

<PAGE>

                                   ARTICLE 24

                                  DUE AUTHORITY

      Tenant (i) represents and warrants that (A) this Lease and all other
documents and instruments delivered to Landlord in connection with this Lease
and the transactions contemplated hereby have been duly authorized, executed and
delivered by and on behalf of Tenant and constitute the valid and binding
agreements of Tenant in accordance with the terms hereof and thereof, (B) this
Lease and the performance by Tenant of its obligations hereunder do not violate
or conflict with any agreement to which Tenant is a party or to which its
property is subject, and (C) no consent of any third party is required with
respect to its execution or delivery of this Lease or performance of its
obligations hereunder, and (ii) shall deliver to Landlord or its agent,
concurrently with the delivery of this Lease executed by Tenant, and at Tenant's
sole expense, certified resolutions of the board of directors (and/or
shareholders, partners or members if required) authorizing Tenant's execution
and delivery of this Lease and the performance of Tenant's obligations
hereunder, a Certificate of Good Standing or equivalent for each of the
jurisdiction of Tenant's organization and the State of Texas and any and all
similar documentation evidencing Tenant's authority and existence as may be
reasonably requested by Landlord. Landlord (i) represents and warrants that (A)
this Lease and all other documents and instruments delivered to Tenant in
connection with this Lease and the transactions contemplated hereby have been
duly authorized, executed and delivered by and on behalf of Landlord and
constitute the valid and binding agreements of Landlord in accordance with the
terms hereof and thereof, (B) this Lease and the performance by Landlord of its
obligations hereunder do not violate or conflict with any agreement to which
Landlord is a party or to which its property is subject, and (C) no consent of
any third party is required with respect to its execution or delivery of this
Lease or performance of its obligations hereunder, and (ii) shall deliver to
Tenant or its agent, concurrently with the delivery of this Lease executed by
Landlord, and at Landlord's sole expense, certified resolutions of officers and
members authorizing Landlord's execution and delivery of this Lease and the
performance of Landlord's obligations hereunder, a Certificate of Good Standing
or equivalent for the jurisdiction of Landlord's organization and the State of
Texas and any and all similar documentation evidencing Landlord's authority and
existence as may be reasonably requested by Tenant.

                                   ARTICLE 25

                               REAL ESTATE BROKERS

      Landlord and Tenant agree to indemnify and hold harmless the other party
from all damages, liability and expense (including reasonable attorneys' fees)
arising from any claims or demands of any broker, licensee, agent or finder
claiming under the indemnifying party for any commission alleged to be due such
party in connection with this Lease.

                                   ARTICLE 26

                                     NOTICES

      All notices and demands required or desired to be given by either party to
the other with respect to this Lease or the Premises shall be in writing and
shall be delivered personally, sent by

                                      -31-

<PAGE>

overnight courier service, prepaid, or sent by United States registered or
certified mail, return receipt requested, postage prepaid, and addressed as
herein provided. Notices to or demands upon Tenant shall be addressed to

            Tenant, prior to the Commencement Date, at

                James Hardie Building Products, Inc.
                26300 La Alameda, Suite 100
                Mission Viejo, California 92691
                Attention: Chief Executive Officer
                and, after the Commencement Date, at the Premises, in both cases

            with copies to

                James Hardie Building Products, Inc.
                26300 La Alameda, Suite 100
                Mission Viejo, California 92691
                Attention: General Counsel

            and

                James Hardie Building Products, Inc.
                26300 La Alameda, Suite 100
                Mission Viejo, California 92691
                Attention: Chief Financial Officer

            and

                James Hardie NV
                26300 La Alameda, Suite 100
                Mission Viejo, California 92691
                Attention: Corporate Secretary

            Notices to or demands upon Landlord shall be addressed to Landlord
            in care of

                Temple-Inland Forest Products Corporation
                303 South Temple Drive
                Diboll, Texas 75941
                Attention: Vice President - Panel Products,

            and a copy to

                Temple-Inland Forest Products Corporation
                303 South Temple Drive
                Diboll, Texas 75941
                Attention: General Counsel

Notices and demands shall be deemed given and served (i) upon receipt or
refusal, if delivered personally, (ii) one (1) business day after deposit with
an overnight courier service, or (iii) three (3)

                                      -32-

<PAGE>

business days after deposit in the United States mails, if mailed. Either party
may change its address for receipt of notices by giving notice of such change to
the other party in accordance herewith. Notices and demands from Landlord to
Tenant may be signed by Landlord, the managing agent for the Premises (provided
Tenant previously has been notified in writing by Landlord of the identity of
such managing agent) or the agent of any of them.

                                   ARTICLE 27

                              HAZARDOUS SUBSTANCES

      Section 27.1. Defined Terms.

                  (a) "Claim" shall mean and include any demand, cause of
            action, proceeding or suit (i) for damages (whether designated as,
            or otherwise encompassing, actual, punitive, foreseeable,
            unforeseeable, consequential, incidental or direct damages), losses,
            liabilities, judgments, injuries to person or property, damages to
            natural resources, fines, penalties, interest, contribution or
            settlement, (ii) for the costs of site investigations, feasibility
            studies, information requests, health or risk assessments or
            Response actions, and (iii) for enforcing insurance, contribution or
            indemnification agreements, and shall include any actual or claimed
            liability arising out of the same, including all reasonable costs
            and expenses, reasonable experts' and consultants' fees and
            reasonable attorneys' fees, expended in the investigation, defense
            or resolution thereof.

                  (b) "Environmental Laws" shall mean and include all federal,
            state and local statutes, ordinances, regulations and rules relating
            to environmental quality, occupational safety, health, safety,
            contamination and clean-up, including, without limitation, the Clean
            Air Act, 42 U.S.C. Section 7401 et seq. ("CAA"); the Clean Water
            Act, 33 U.S.C. Section 1251 et seq. and the Water Quality Act of
            1987; the Federal Insecticide, Fungicide, and Rodenticide Act
            ("FIFRA"), 7 U.S.C. Section 136 et seq.; the Marine Protection,
            Research, and Sanctuaries Act, 33 U.S.C. Section 1401 et seq.; the
            National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.;
            the Noise Control Act, 42 U.S.C. Section 4901 et seq.; the
            Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.;
            the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
            Section 6901 et seq., as amended by the Hazardous and Solid Waste
            Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C. Section
            300f et seq.; the Solid Waste Disposal Act, 42 U.S.C. Section 1801
            et seq. the Federal Water Pollution Control Act, as amended, 33
            U.S.C. Section 1251, et seq. ("FWPCA"), the Hazardous Materials
            Transportation Act, 49 U.S.C. Section 1801, et seq. ("HMRA"); the
            Comprehensive Environmental Response, Compensation and Liability Act
            ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the
            Superfund Amendments and Reauthorization Act, the Emergency Planning
            and Community Right-to-Know Act, and the Radon Gas and Indoor Air
            Quality Research Act; the Toxic Substances Control Act ("TSCA"), 15
            U.S.C. Section 2601 et seq.; the Atomic Energy Act, 42 U.S.C.
            Section 2011 et seq., and the Nuclear Waste Policy Act of 1982,42
            U.S.C. Section 10101 et seq.; and any successor statutes and
            regulations to the foregoing and state superlien and environmental
            clean-up statutes, with implementing regulations and guidelines.
            Environmental Laws shall also include all state, regional, county,
            municipal and other local laws, regulations and

                                      -33-

<PAGE>

            ordinances insofar as they are equivalent or similar to the federal
            laws recited above or purport to regulate Hazardous Materials.

                  (c) "Hazardous Materials" shall mean any waste, substances or
            material the exposure to which is classified, limited, regulated or
            prohibited by any governmental authority (federal, state or local)
            including, but in no way limited to the following, including
            mixtures thereof: any hazardous substance, pollutant, contaminant,
            waste, by-product or constituent regulated under CERCLA; oil and
            petroleum products and natural gas, natural gas liquids, liquefied
            natural gas and synthetic gas usable for fuel; pesticides regulated
            under the FIFRA; asbestos and asbestos materials, PCBs and other
            substances regulated under the TSCA; source material, special
            nuclear material, by-product material and any other radioactive
            materials or radioactive wastes; however produced, regulated under
            the Atomic Energy Act or the Nuclear Waste Policy Act; chemicals
            subject to the OSHA Hazard Communication Standard, 29 C.F.R. Section
            1910.1200 et seq.; industrial process and pollution control wastes
            within the meaning of RCRA; "hazardous materials" under the HMTA;
            "hazardous air pollutants" under the CAA; a "hazardous substance" or
            "toxic pollutant" under the FWPCA and any and all toxic or hazardous
            materials addressed by regulations promulgated now or hereafter
            under the above referenced laws, related or similar laws, whether
            the same be presently in existence or hereafter promulgated.

                  (d) "Manage" means to generate, manufacture, process, treat,
            store, use, misuse, refine, recycle, reclaim, blend or burn for
            energy recovery, incinerate, accumulate speculatively, transport,
            transfer, dispose of or abandon Hazardous Materials.

                  (e) "Release" or "Released" shall mean any spilling, leaking,
            pumping, pouring, emitting, emptying, discharging, injecting,
            escaping, leaching, dumping or disposing of Hazardous Materials into
            the environment, as "environment" is defined in CERCLA.

                  (f) "Response" or "Respond" shall mean action taken in
            compliance with Environmental Laws to correct, remove, remediate,
            clean-up, prevent, mitigate, monitor, evaluate, investigate, assess
            or abate the Release of a Hazardous Material.

      Section 27.2. Tenant's Obligations with Respect to Environmental Matters.
During the Term (i) Tenant shall at its own cost conduct its activities in, on,
and about the Premises in compliance with all Environmental Laws and, to the
extent required thereby, obtain all appropriate permits; (ii) Tenant shall not
conduct, allow, permit or authorize the Management of any Hazardous Materials on
the Premises, including installation of any underground storage tanks, without
prior written disclosure to and approval by Landlord, such approval to be given
or withheld in Landlord's sole and unfettered discretion; (iii) Tenant shall not
take any action that would subject the Premises to permit requirements under
RCRA or any other Environmental Laws for storage, treatment or disposal of
Hazardous Materials; (iv) Tenant shall not dispose of Hazardous Materials in
dumpsters provided by Landlord for Tenant use; (v) Tenant shall not discharge
Hazardous Materials on or about the Premises, including, but not limited to,
into drains or sewers; (vi) Tenant shall not cause, permit or allow the Release
of any Hazardous Materials on, to or from the Premises, and (vii) Tenant shall
at its own cost arrange for the lawful transportation and offsite disposal of
all Hazardous Materials that it generates or which, are present on the Premises
as a result of the activities of Tenant, its subtenants, agents, employees,
contractors or invitees during the Term of the Lease. Notwithstanding the
foregoing, Tenant may use on the Premises those Hazardous Materials normally

                                      -34-

<PAGE>

used in connection with the Permitted Use so long as Tenant's use, storage and
transportation thereof complies in all respects with all applicable
Environmental Laws. Notwithstanding the foregoing, Tenant shall not be
responsible for any pre-existing Hazardous Materials at the Premises as more
particularly discussed in Section 8.4 hereof.

      Section 27.3. Copies of Notices. During the Term, each party hereto shall
promptly provide the other with copies of all summons, citations, directives,
information inquiries or requests, notices of potential responsibility, notices
of violation or deficiency, orders or decrees, Claims, complaints,
investigations, judgments, letters, notices of environmental liens or Response
actions in progress and other communications, written or oral, actual or
threatened, from the United States Environmental Protection Agency, Occupational
Safety and Health Administration, Texas National Resources Conservation
Commission or other federal, state or local agency or authority, or any other
entity or individual, concerning (i) any Release of a Hazardous Material on, to
or from the Premises, (ii) the imposition of any lien on the Premises, or (iii)
any alleged violation of or responsibility under Environmental Laws. Landlord,
the holders of any Mortgages (if accompanied by Landlord) and their respective
employees shall have the right to enter the Premises and conduct appropriate
inspections or tests in order to determine Tenant's compliance with
Environmental Laws or if Landlord or the holder of any Mortgage has reason to
believe that the Premises are not free of Hazardous Materials (other than
Hazardous Materials being used by Tenant in the ordinary course of its business
in compliance with the requirements of this Lease). Landlord agrees to use
reasonable efforts to perform such inspections and tests in a manner so as to
minimize disruption of the operations of Tenant conducted on the Premises.

      Section 27.4. Tests and Reports. Upon written request by Landlord, Tenant
shall provide Landlord with the results of appropriate reports and tests, with
transportation and disposal contracts for Hazardous Materials, with any permits
issued under Environmental Laws, and with any other applicable documents to
demonstrate that Tenant has complied with all Environmental Laws relating to the
Premises. Prior to the execution of this Lease, Landlord has provided copies of
all such items and documents described in the prior sentence which are in
Landlord's possession that relate to the Premises. Landlord represents and
warrants to Tenant that, as of the date of this Lease, to Landlord's knowledge,
without inquiry (a) there are no Hazardous Materials (nor Releases thereof) at
the Premises as of the Commencement Date except as disclosed in writing to
Tenant, and (b) there are no Claims relating to Hazardous Materials at the
Premises from any third party or governmental authority.

      Section 27.5. Access and Inspection. In addition to any other rights of
entry or access to the Premises pursuant to this Lease and applicable laws,
Landlord, the holders of any Mortgages (if accompanied by Landlord) and their
respective agents and representatives shall have access to the Premises and to
the books and records of Tenant (and any occupant of the Premises claiming by,
through or Tenant) relating to Hazardous Materials upon seven (7) days prior
written notice to Tenant, which notice sets forth the applicable purpose for
such access as described below, or without notice in the event of an emergency,
for the purpose of ascertaining the nature of the activities being conducted
thereon and to determine the type, kind and quantity of all products, materials
and substances brought onto the Premises or made or produced thereon, provided,
however, all such parties (other than holders of Mortgages) shall execute and
deliver to Tenant a Confidentiality Undertaking as a condition to such access
(except that such Confidentiality Undertaking may be delivered as soon as
reasonably practicable thereafter in the event of an emergency). Landlord, the
holders of any Mortgages (if accompanied by Landlord) and their respective
agents and

                                      -35-

<PAGE>

representatives shall have the right to take samples in quantity sufficient for
scientific analysis of all products, materials and substances present on the
Premises, including, but not limited to, samples of products, materials or
substances brought onto or made or produced on the Premises by Tenant or an
occupant claiming by, through or under Tenant or otherwise present on the
Premises. Further, notwithstanding any provision of this Lease or applicable
statutes or judicial decisions to the contrary, with respect to any assignment,
subletting, grant of license or concession or any other permission to use the
Premises by any person other than Tenant, Landlord shall have the right to
withhold Landlord's consent thereto if, in Landlord's sole and unfettered
judgment, the assignee, subtenant, licensee, concessionaire or such other person
is not capable, either financially or operationally, of performing or is not
sufficiently qualified to perform in accordance with the requirements of this
Article 27. Any assignment, sublease, license or other permission to use the
Premises from which Landlord withholds its consent as provided in this Section
27.5 shall be void and of no further force and effect.

      Section 27.6. Obligation to Respond. If Tenant's Management of Hazardous
Materials at the Premises, the occurrence of any Release thereon-or on any
adjacent or contiguous property or the existence or presence of any Hazardous
Material, (i) gives rise to liability or to a Claim under any Environmental Law,
(ii) causes a significant public health effect or threat, or (iii) creates a
nuisance, Tenant shall promptly, but in no event later then five (5) days
thereafter, or after its knowledge of same in the event of a Release on adjacent
or contiguous property notify Landlord and take all applicable action in
Response. In the event that Tenant has assigned this Lease or subleased any
portion of the Premises other than to an Affiliate in accordance with Section
14.1 and Landlord determines that the nature of the liability or Claim is such
that Landlord does not want the Response to be undertaken by Tenant's assignee
or sublessee, as applicable, Landlord shall have the right and option (but in no
event shall this right and option imply or create any obligation on the part of
Landlord) upon the giving of reasonable notice to Tenant's assignee or
sublessee, as applicable, to undertake the Response, and any costs or expenses
incurred by Landlord in pursuing such Response shall be paid by Tenant or such
assignee or sublessee.

      Section 27.7. Indemnification. Tenant shall indemnify, defend (with
counsel satisfactory to Landlord) and hold harmless Landlord, its lenders, any
managing agents and leasing agents of the Premises, and their respective agents,
partners, officers, contractors, directors, shareholders, members and employees,
from all Claims arising from or attributable to: (i) the Release of any
Hazardous Materials on the Premises during or after the Term (including any
holdover periods) of, or otherwise arising out of Tenant's or its agents',
contractors', employees' or invitees' use of the Premises pursuant to this Lease
or the presence, whether or not due to Tenant's Management, of Hazardous
Materials in or on the Premises or the subsurface thereof or the violation of
any Environmental Laws by Tenant, its agents, contractors, employees or
invitees, whether or not due to Tenant's Management (including, without limiting
the generality thereof, any cost, claim, liability or defense expended in
remediation required by a governmental authority); (ii) any federal, state or
local governmental investigation or inquiry relating to Tenant's use or
occupancy of the Premises, or occurring during the Term, whether the same be
justified or caused by Tenant or its actions; or (iii) any breach by Tenant of
any of its warranties, representations or covenants in this Section or, to the
extent the same relate to or impact any Environmental Laws, any other Section of
this Lease. Tenant's obligations hereunder shall survive the termination or
expiration of this Lease and shall further survive any transfer of all or any
portion of the Premises, whether by Landlord or Tenant. The foregoing
notwithstanding, Tenant shall have no liability pursuant to the foregoing
indemnity for any environmental condition or related inquiry that arises out of
actual physical events (including

                                      -36-

<PAGE>

any Management or Release) occurring prior to the Term of this Lease or arising
after the termination of this Lease and to which Tenant, its agents, employees
and contractors have not contributed or that arises solely as a result of the
actions of Landlord or its agents. This Section 27.7 shall be binding upon the
successors and assigns of Tenant and shall survive the expiration or earlier
termination of this Lease. The provisions of Article 15 of this Lease shall not
be construed to limit or circumscribe the obligations of the parties pursuant to
this Section 27.7.

                                   ARTICLE 28

                        TITLE AND COVENANT AGAINST LIENS

      Landlord's title is and always shall be paramount to the title of Tenant,
and nothing in this Lease contained shall empower Tenant to do any act which
can, shall or may encumber the title of Landlord. Tenant covenants and agrees
not to suffer or permit any lien of mechanics or materialmen to be placed upon
or against the Premises or Tenant's leasehold interest in the Premises. Tenant
has no authority or power to cause or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation of law or otherwise, to
attach to or be placed upon the Premises, and any and all liens and encumbrances
created by Tenant shall attach only to Tenant's interest in the Premises. If any
such liens so attach and Tenant fails to bond over to Landlord's satisfaction or
pay and remove same within ten (10) days, then Landlord, at its election with
prior notice to Tenant, may pay and satisfy the same, and in such event the sums
so paid by Landlord shall accrue with interest from the date of payment at the
rate set forth in Section 29.8 hereof for amounts owed Landlord by Tenant. Such
sums shall be deemed to be Additional Rent.

                                   ARTICLE 29

                                  MISCELLANEOUS

      Section 29.1. Successors and Assigns. Subject to the provisions of Article
14, each provision of this Lease shall extend to and shall bind and inure to the
benefit not only of Landlord and Tenant, but also their respective heirs, legal
representatives, successors and assigns, but this provision shall not operate to
permit any transfer, assignment, mortgage, encumbrance, lien, charge or
subletting contrary to the provisions of this Lease, and Landlord agrees not to
sell or transfer the Premises or to allow the sale or transfer of the ownership
interest of Temple-Inland Forest Products Corporation in Landlord to any entity
not affiliated with Tenant which engages in the manufacture of fiber-cement
products, provided, however, that, except as set forth above, such restriction
shall not apply to any sale of substantially all of the assets of Landlord or to
any sales or encumbrances of ownership interests in Landlord.

      Section 29.2. Modifications in Writing. No modification, waiver or
amendment of this Lease or of any of its conditions or provisions shall be
binding unless in writing signed by Landlord and Tenant.

      Section 29.3. No Option; Irrevocable Offer. Submission of this instrument
for examination shall not constitute a reservation of or option for the Premises
or in any manner bind Landlord, and no lease or obligation of Landlord shall
arise until this instrument is signed and delivered by Landlord and Tenant;
provided, however, the execution and delivery of this Lease to Landlord or its

                                      -37-

<PAGE>

agent by Tenant shall constitute an irrevocable offer by Tenant to lease the
Premises on the terms and conditions herein contained, which offer may not be
revoked for thirty (30) days after such delivery.

      Section 29.4. Definition of Tenant. The word "Tenant" whenever used herein
shall be construed to mean Tenants or any one or more of them in all cases where
there is more than one Tenant; and the necessary grammatical changes required to
make the provisions hereof apply either to corporations or other organizations,
partnerships or other entities, or individuals, shall in all cases be assumed as
though in each case fully expressed herein. In all cases where there is more
than one Tenant, the liability of each shall be joint and several.

      Section 29.5. Definition of Landlord. The term "Landlord" as used in this
Lease means only the owner or owners at the time being of the Premises so that
in the event of any assignment, conveyance or sale, once or successively, of
said Premises, or any assignment of this Lease by Landlord, said Landlord making
such sale, conveyance or assignment shall be and hereby is entirely freed and
relieved of all covenants and obligations of Landlord hereunder accruing after
such sale, conveyance or assignment, and Tenant agrees to look solely to such
purchaser, grantee or assignee with respect thereto. This Lease shall not be
affected by any such assignment, conveyance or sale, and Tenant agrees to attorn
to the purchaser, grantee or assignee.

      Section 29.6. Headings. The headings of Articles and Sections are for
convenience only and do not limit, expand or construe the contents of the
Sections.

      Section 29.7. Time of Essence. Time is of the essence of this Lease and of
all provisions hereof.

      Section 29.8. Default Rate of Interest. All amounts (including, without
limitation, Base Rent, Additional Rent, and any damages, costs, expenses,
penalties, fines, indemnity claims and related or similar amounts due under this
Lease, including, but not limited to, those amounts under Article 18 hereof,
whether the same be stipulated or otherwise) owed by Tenant to Landlord pursuant
to any provision of this Lease shall bear interest from that date which is
thirty (30) days after the date due under this Lease until paid at the annual
rate of four percent (4%) in excess of the rate of interest announced from time
to time by Guaranty Federal Bank, F.S.B., or its successor bank, as its prime,
reference or corporate base rate, changing as and when said prime rate changes,
unless a lesser rate shall then be the maximum rate permissible by law with
respect thereto in which event said lesser rate shall be charged. Any such
interest shall be in addition to any late charges incurred by Tenant under
Section 3.3 hereof.

      Section 29.9. Severability. The invalidity of any provision of this Lease
shall not impair or affect in any manner the validity, enforceability or effect
of the rest of this Lease.

      Section 29.10. Entire Agreement. All understandings and agreements, oral
or written, heretofore made between the parties hereto are merged in this Lease,
which alone fully and completely expresses the agreement between Landlord (and
its agents) and Tenant.

      Section 29.11. Force Majeure. If Landlord fails to perform any of its
obligations hereunder, and such failure is due in whole or in part to any
strike, lockout, labor trouble, civil disorder, failure of power, restrictive
governmental laws and regulations, riots, insurrections, war, fuel shortages,

                                      -38-

<PAGE>

accidents, casualties, acts of God, acts caused directly or indirectly by Tenant
(or its agents, employees, contractors, licensees or invitees) or any other
cause beyond the reasonable control of Landlord, then Landlord shall not be
deemed in default under this Lease as a result of such failure and the time for
performance by Landlord provided for herein shall be extended by the period of
delay resulting from such cause.

      Section 29.12. Survival. All obligations, monetary or otherwise, accruing
prior to expiration of the Term shall survive the expiration or earlier
termination of this Lease.

      Section 29.13. Relationship of Parties. This Lease does not create the
relationship of principal and agent, or of partnership, joint venture or of any
association or relationship between Landlord and Tenant, the sole relationship
between Landlord and Tenant being that of landlord and tenant.

      Section 29.14. Surrender. No surrender to Landlord of this Lease or of the
Premises, or any portion thereof, or any interest therein, prior to the
expiration of the Term shall be valid or effective unless agreed to and accepted
in writing by Landlord and consented to in writing by all ground lessors and the
holders of all Mortgages, and no act or omission by Landlord or any
representative or agent of Landlord, other than such a written acceptance by
Landlord consented to by all such ground lessors and/or mortgagees, as
aforesaid, shall constitute an acceptance of any such surrender.

      Section 29.15. No Merger. There shall be no merger of this Lease or the
leasehold estate created by this Lease with any other estate or interest in the
Premises by reason of the fact that the same person, firm, corporation or other
entity may acquire, hold or own directly or indirectly, this Lease or the
leasehold interest created by this Lease or any interest therein and any such
other estate or interest in the Premises or any portion thereof. No such merger
shall occur unless and until all persons, firms, corporations or other entities
having an interest (including a security interest) in this Lease or the
leasehold estate created hereby and any such other estate or interest in the
Premises or any portion thereof shall join in a written instrument expressly
effecting such merger and shall duly record the same.

      Section 29.16. Governing Law. This Lease shall be governed in all respects
by the laws of the State of Texas. Should either party institute legal suit or
action for enforcement of any obligation contained herein, it is agreed that the
venue of such suit or action shall be, at Landlord's option, in Dallas County,
Texas. Tenant expressly consents to Landlord's designation of the venue of any
such suit or action. Although the provisions of this Lease were initially drawn
by the Landlord, this Lease shall not be construed either for or against
Landlord or Tenant, but this Lease shall be interpreted in accordance with the
general terms of the language in an effort to reach an equitable result.

      Section 29.17. Quiet Possession. Upon Tenant paying the Rent for the
Premises and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have quiet possession of the Premises for the entire term hereof subject to all
of the provisions of this Lease. In connection therewith, Landlord warrants and
represents to Tenant that, as of the date of this Lease (a) Landlord has good
and indefeasible title to the Premises, subject to liens for ad valorem taxes
not yet due and payable, easements, and other matters which do not materially
interfere with use of the Premises as it is used on the date of this Lease; and
(b) to Landlord's knowledge, without inquiry, no litigation has been initiated
or threatened against the Landlord or the Premises which would impair the
Landlord's performance of this Lease.

                                      -39-

<PAGE>

      Section 29.18. Landlord's Lien Waiver. Landlord hereby expressly waives
and disclaims any statutory, constitutional or contractual lien benefitting
Landlord for rent, damages and costs pursuant to Texas statutes or otherwise.

      Section 29.19. Intent - Triple Net Lease. Except as otherwise expressly
set forth herein, this Lease shall be deemed to be construed as a triple net
lease and any and all expenses and obligations in connection with the Premises
and the operation thereof will be the obligation of Tenant.

      Section 29.20. Usury. Notwithstanding any provision contained herein to
the contrary, if any interest rate specified in this Lease is higher than the
rate then permitted by law, such interest rate specified herein shall
automatically be adjusted from time to time to the maximum rate permitted by
law.

      Section 29.21. Financial Statements. Any successor or assign of Tenant
shall promptly furnish Landlord when available, annual financial statements
(which are prepared and audited consistent with the policies and procedures of
such successor or assign reflecting its current financial condition).

      Section 29.22. Consents and Approvals. Whenever Tenant requests Landlord
to take any action or give any consent or approval, Tenant shall reimburse
Landlord for all of Landlord's reasonable costs incurred in reviewing the
proposed action or consent (whether or not Landlord consents to any such
proposed action), including, without limitation, reasonable attorneys' or
consultants' fees and expenses, within thirty (30) days after Landlord's
delivery to Tenant of a statement of such costs. If it is determined that
Landlord failed to give its consent or approval where it was required to do so
under this Lease, Tenant's sole remedy will be an order of specific performance
or mandatory injunction of Landlord's agreement to give its consent or approval.
The review and/or approval by Landlord of any item shall not impose upon
Landlord any liability for accuracy or sufficiency of any such item or the
quality or suitability of such item for its intended use. Any such review or
approval is for the sole purpose of protecting Landlord's interest in the
Premises, and neither Tenant nor any person or entity claiming by, through or
under Tenant, nor any other third party shall have any rights hereunder by
virtue of such review and/or approval by Landlord.

      Section 29.23. Option to Purchase. Landlord hereby grants Tenant an option
to purchase the Premises, or so much thereof as may remain after any partial
condemnation (in which case such purchase price will be proportionally adjusted
if more than five percent (5%) of the land comprising the Premises was taken,
except to the extent the proceeds thereof were distributed to Tenant in
accordance with Article 17), and all fixtures and personal property therein on
an "AS-IS" basis as of the Expiration Date for Eight Million and 00/100 Dollars
($8,000,000) and otherwise on the terms and conditions set forth herein,
provided that Landlord has not terminated this Lease or Tenant's right of
possession of the Premises under Article 18 and there exist no Events of Default
or events which, with the lapse of time, the giving of notice, or both, would
constitute an Event of Default at the time of Tenant's exercise of the option
herein granted or as of the Expiration Date. In the event Tenant desires to
exercise the option herein granted, it shall furnish Landlord written notice of
its intent to do at least six (6) and not more than twelve (12) months prior to
the Expiration Date. Upon delivering such notice, Tenant agrees that it shall be
bound and obligated to purchase the Premises as set forth herein. Tenant agrees
and acknowledges that Landlord shall be obligated to deliver only a special
warranty deed conveying good and indefeasible fee simple title to the Purchaser,
subject to all covenants, conditions and restrictions of record, and free of any
liens claimed by, through or

                                      -40-
<PAGE>

under Landlord. Tenant and Landlord shall each pay one half of all escrow fees
and recording costs. Landlord shall pay all title insurance premiums and
reasonable costs for a survey prepared by a surveyor acceptable to Landlord and
Tenant. Tenant shall pay all other costs and expenses of consummating its
purchase of the Premises including, without limitation, any transfer taxes.
Tenant acknowledges that the option granted herein is personal to Tenant and may
not be assigned without the written consent of Landlord in its sole and absolute
discretion (except to an Affiliate of Tenant under Section 14.1).

      Section 29.24. Right of First Refusal. In the event Landlord or any
successor or assign is prepared to make a written proposal to or accept a
proposal from a third party to purchase the Premises during the Term, Landlord,
for itself and on behalf of such successors and assigns, hereby grants to Tenant
and to its successors and permitted assigns the continuing right to purchase the
Premises on the same terms and conditions contained in said proposal. Landlord
shall deliver the proposal to Tenant and Tenant shall have ten (10) business
days from the date of delivery of the proposal to exercise its right to purchase
the Premises on the terms and conditions set forth in the proposal by delivering
to Landlord a copy of the proposal which has been signed by Tenant. In the event
Tenant does not timely exercise its right to purchase the Premises within said
ten (10) business day period and Landlord fails to consummate the sale thereof
to the third party in accordance with such third party proposal, Tenant's right
of first refusal hereunder shall apply to subsequent proposals. Tenant's failure
to exercise such right within such ten (10) day period shall entitle Landlord to
sell the Premises only in accordance with such third party proposal, free and
clear of Tenant's rights under this Section 29.24.

                                   ARTICLE 30

                                   DEFINITIONS

      The following terms have the meanings ascribed to them in the Sections set
forth below:

<TABLE>
<S>                       <C>
ADA                       Section 8.4

Additional Rent           Section 3.1(b)

Affiliate                 Section 14.1

Base Rent                 Section 3.1(a)

Bond-Financed Project     Article 1

Bonds                     Article 1

CAA                       Section 27.1(b)

Calculation Date          Section 18.5

CERCLA                    Section 27.1(b)

Claim                     Section 27.1

Commencement Date         Section 2.1

Contracts                 Section 2.4(a)
</TABLE>

                                      -41-
<PAGE>

<TABLE>
<S>                                     <C>
Controlling                             Section 14.1

Environmental Laws                      Section 27.1 (b)

Event of Default                        Section 18.1

Excluded Taxes                          Section 4.2

Expiration Date                         Section 2.1

FIFRA                                   Section 27.1(b)

Fire Underwriters Requirements          Section 8.4

First Mortgage                          Section 19.1

FWPCA                                   Section 27.1(b)

Guarantor                               Section 5.1

Hazardous Materials                     Section 27.1(c)

HMRA                                    Section 27.1(b)

Impositions                             Section 4.2

Landlord                                Section 30.5

Landlord Guaranty                       Section 5.2

Landlord Option Date                    Section 18.8(b)(vii)(A)

Leased Equipment                        Section 2.3(f)

Legal Requirements                      Section 8.4

Loan Agreement                          Section 6.5

Manage                                  Section 27.1(d)

Mortgage or Mortgages                   Section 19.1

Net Worth                               Section 5.1

Non-Structural Alterations              Article 13

Permitted Uses                          Section 6.1

Personal Property                       Section 2.3(a)

Personal Property Taxes                 Section 4.8

Premises                                Article 1

Prohibited Use                          Section 6.2

RCRA                                    Section 27.1(b)

Raw Materials                           Section 2.3(c)
</TABLE>

                                      -42-
<PAGE>

<TABLE>
<S>                             <C>
Release or Released             Section 27.1(e)

Rent                            Section 3.2

Rent Taxes                      Section 4.8

Rents                           Section 3.1

Response or Respond             Section 27.1(f)

Security Deposit                Section 5.1

Spare Parts                     Section 2.3(d)

Surplus Equipment               Section 2.3(b)(ii)

Tenant                          Section 30.4

Tenant Guaranty                 Section 5.1

Term                            Section 2.1

TSCA                            Section 27.1(b)
</TABLE>

                                      -43-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed as of the date first written.

                                       LANDLORD:

                                       FORTRA FIBER-CEMENT L.L.C., a Delaware
                                         limited liability company

                                       By: /s/ Harold C. Maxwell
                                           -------------------------------------
                                           Harold C. Maxwell, President

                                       TENANT:

                                       JAMES HARDIE BUILDING PRODUCTS, INC., a
                                         Nevada corporation

                                       By: /s/ Louis Gries
                                           -------------------------------------
                                           Louis Gries, President

                                      -44-
<PAGE>

                                   EXHIBIT "A"

                              Property Description

      BEING all that certain lot, tract or parcel of land lying in the A.W.
      BROWN SURVEY, A-102; A.S. PRUETT SURVEY, A-848; J. SHAVER SURVEY, A-1000;
      and in the J. STARRETT SURVEY, A-1024, in City of Waxahachie, Ellis
      County, Texas, and being a part of a called 94.448 acre tract of land as
      conveyed to TX-WYO, INC., by deed and recorded in Volume 809, Page 998,
      Deed Records, Ellis County, Texas, (DRECT), and being more particularly
      described as follows:

      BEGINNING at a railroad spike found in the east line of the M.K. & T.
      Railroad for the most westerly northwest corner of this tract and same for
      the aforesaid tract and also being the most southwesterly southwest corner
      of a called THIRD TRACT (43.19 acres) of land as described by deed and
      recorded in Volume 619, Page 170, DRECT;

      THENCE S 89"40'51" E, 360.70 feet (Deed - S 89"34'30" E, Same Distance)
      along the upper north line of this tract and same for the aforesaid tract
      and along the lower south line of the called 43.19 acre tract to a 1/2"
      steel rod found for the westerly northeast corner of this tract and same
      for the aforesaid tract and being the westerly southeast corner of the
      called 43.19 acre tract and also lies in the west line of Block B of the
      North Waxahachie Industrial Park addition to the City of Waxahachie
      according to the plat thereof recorded in Cabinet B. Slides 160-162, Plat
      Records, Ellis County, Texas, (PRECT);

      THENCE S 00"43'28" W, (Deed - S 01"01'30" W, 327.11') along the upper
      east line of this tract and same for the aforesaid tract and along the
      west line of the aforesaid Block B at approximately 84 feet pass the
      southwest corner of said Block B and northwest corner of Block A, in all,
      327.04 feet to a 5/8" steel rod found for the interior northwest corner of
      this tract and same for the aforesaid tract and being the southwest corner
      of the said Block A;

      THENCE S 89"58'15" E, 1708.79 feet along the lower north line of this
      tract and same for the aforesaid tract and along the south line of Block A
      of said addition to a 1/2" steel rod found for the northeast corner of
      this tract and being in the south line of said addition and also being the
      northwest corner of a called 0.57 acre tract of land as described by deed
      and recorded In Volume 609, Page 616, DRECT;

      THENCE S 14"47'39" W, along the east line of this tract and same for the
      aforesaid tract at approximately 72.5 feet pass the southwest corner of
      the called 0.57 acre tract and the northwest corner of a called 0.57 acre
      tract of land conveyed to Ralph A. Holder by deed and recorded in Volume
      673. Page 086, DRECT, at approximately 175.7 feet pass the northwest
      corner of the Holder 0.57 acre tract and the northwest corner of a called
      0.57 acre tract of land conveyed to David W. Flanagan by deed and recorded
      in Volume 570, Page 632, Deed of Trust Records, Ellis County, Texas, all,
      279.01 feet (Deed - S 15"03'20" W, 279.09 feet) to a 1/2" steel rod found
      for an east corner of this tract and same for the aforesaid tract and
      being the southwest corner of the said Flanagan 0.57 acre tract;

<PAGE>

      THENCE S 74"29'50" E, 06.53 feet ( Deed - S 74"11'00" E, Same Distance )
      along an east line of the aforesaid tract and same for this tract and
      along the south line of the called Flanagan 0.57 acre tract to a 1/2"
      steel rod set for an east corner of this tract and same for the aforesaid
      tract and being the northwest corner of a called 0.50 acre tract of land
      as described by deed and recorded in Volume 570, Page 832, DRECT;

      THENCE S 15"01'49" W, 124.36 feet ( Deed - S 15"20'00" W, Same Distance )
      along the west line of the called 0.50 acre tract and the east line of
      this tract to a 1/2" steel rod found for an easterly corner of this tract
      and same for the aforesaid tract and being the southwest corner of the
      called 0.50 acre tract;

      THENCE S 75"19'02" E, 173.36 feet ( Deed - S 74"58'00" E, 173.45 feet )
      along an easterly north line of this tract and same for the aforesaid
      tract and along the south line of the called 0.50 acre tract to a 1/2"
      steel pipe found in the current west line of U.S. Highway 77 for the lower
      northeast corner of this tract and easterly corner of the aforesaid tract
      and being the southeast corner of the called 0.50 acre tract;

      THENCE S 14"57'45" W, 360.35 feet ( Deed - S 15"14'00" W ) ( NOTE:
      Bearings for this description from Texas Co-ordinate System, North Central
      Zone, NAD 27, and provided by the Texas Department of Transportation,
      Waxahachie Office ) along the east line of this tract and same for the
      aforesaid tract to a 1/2" steel rod set for the southeast corner of this
      tract;

      THENCE N 89"58'15" W, 2444.82 feet through the aforesaid 94.448 parent
      tract of land to a 1/2" steel rod set in the west line of the aforesaid
      parent tract and cast line of the said M.K. & T. Railroad for the
      southwest corner of this tract;

      THENCE N 16"57'48" E, 1180.01 feet ( Deed - N 17"15'20" E ) along the west
      line of the aforesaid tract and same for this tract and along the east
      line of the said M.K. & T. Railroad to the POINT OF BEGINNING and
      containing approximately 45.490 acres of land.

SAVE AND EXCEPT:

BEING 0.07824 hectares [0.1933 acres] of land, more or less, situated in the
Albert S. Pruitt Survey, Abstract Number 848, City of Waxahachie, Ellis County,
Texas, and being situated in a portion of a called 45.490 acre tract of land
described in instrument to Temple/Re-Con Inc., as recorded in Volume 1315, Page
96, of the Deed Records of Ellis-County, Texas (DRECT), said 0.07824 hectares
[0.1933 acres] of land being more particularly described by metes and bounds as
follows:

COMMENCING for reference at a found 1/2-inch iron rod in an easterly line of
said 45.490 acre tract, same being the southwest corner of a called 0.499 acre
tract of land described in instrument to Fred Marvin Graham, and wife, Mary
Louise Graham, as recorded in Volume 570, Page 832, DRECT;

<PAGE>

THENCE S 75(degrees)13'42" E, along a north line of said 45.490 acre tract and
the south line of said 0.499 acre tract, a distance of 52.742 meters [173.04
feet] to the southeast corner of said 0.499 acre tract and being in the existing
western right of way line of U.S. Highway 77, from which a found 1/2-inch iron
pipe bears S 75(degrees)13'42" E, a distance of 0.100 meters [0.33 feet];

THENCE S 14(degrees)55'27" W, along the eastern line of said 45.490 acre tract
and along the existing western right of way line of U.S. Highway 77, a distance
of 15.578 meters [51.11 feet] to a 5/8-inch iron rod with an aluminum disk
marked Texas Department of Transportation (TxDOT) set in the new western right
of way line of U.S. Highway 77 for the POINT OF BEGINNING;

      (1)   THENCE S 14(degrees)55'27" W, along the existing western right of
            way line of U.S. Highway 77, a distance of 94.300 meters [309.38
            feet] to a 1/2-inch iron rod found for the southeast corner of said
            45.490 acre tract, same being the remainder north line of a called
            94.448 acre tract of land described in instrument to TX-WYO, Inc. as
            recorded in Volume 809, Page 998, DRECT;

      (2)   THENCE N 89(degrees)58'08" W, along the south line of said 45.490
            acre tract, a distance of 17.202 meters [56.44 feet] to a 5/8-inch
            iron rod with an aluminum disk marked TxDOT set in the new western
            right of way line of U.S. Highway 77;

      (3)   THENCE N 23(degrees)50'19" E, along the new western right of way
            line of U.S. Highway 77, a distance of 12.235 meters [40.14 feet] to
            a set 5/8-inch iron rod with an aluminum disk marked TxDOT;

      (4)   THENCE N 24(degrees)43'38" E, along the new western right of way
            line of U.S. Highway 77, a distance of 69.969 meters [229.56 feet]
            to a set 5/8-inch iron rod with an aluminum disk marked TxDOT;

      (5)   THENCE N 23(degrees)57'59" E, along the new western right of way
            line of U.S. Highway 77, a distance of 17.909 meters [58.76 feet] to
            the POINT OF BEGINNING, and containing 0.07824 hectares [0.1933
            acres] of land area, more or less, within these metes and bounds.

<PAGE>

                                    EXHIBIT B

                          SCHEDULE OF PERSONAL PROPERTY

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

MCC Room

0321            Cabinet

0322            Cabinet

0323            Cabinet

0324            Desk

Storeroom

0325            Chair

0326            Cabinet

0327            Cabinet

0328            Cabinet

Production

0329            Cabinet

0330            Stool

0331            Stool

0332            Upright Cabinet

0333            Desk

0334            Upriqht Cabinet

0335            Shelf

0336            Shelf

0337            Shelf

0338            Shelf

0339            Shelf

0340            Shelf

0341            Shelf

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing
QA Lab

0342      Shelf

0343      Shelf

0344      Shelf    MCC Room

0345      Stool

0346      File Cabinet

0347      Desk

0348      Bookshelf

0349      Desk

0350      Stool

0351      Computer Desk

0352      Chair

0353      Shelf

0354      Shelf

0355      Work Table

0356      Table

0357      Chair

0358      Stool

0359      Stool

0360      Table

0361      Table

0362      Table

0363      Table

0364      Table

Production Conference Room

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0365      Upright Cabinet

0366      Upright Cabinet

0367      Desk

0368      File Cabinet

0369      File Cabinet

0370      File Cabinet

0371      File Cabinet

0372      File Cabinet

0373      Table Conference Room

0374      Chair

0375      Chair

0376      Chair

0377      Chair

0378      Chair

0379      Chair

0380      Chair

0381      Chair

0382      Chair

0383      Chair

0384      Chair

0385      Chair

0386      Chair

0387      Chair

Production Office & Conference Room

0388      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0389      Chair

0390      Chair

0391      Chair

0392      Chair

0393      Chair

0394      Chair

0395      Chair

0396      Chair

0397      TV Stand

0398      File Cabinet

0399      File Cabinet

0400      Bookshelf

0401      Table

0402      Desk

0403      Desk

0404      Desk

0405      Stool

0406      Chair

0407      Chair

0408      Chair

0409      Chair

0410      Chair

Production Office

0411      Cabinet

0412      Telephone Stand

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0413      BookShelf

0414      BookShelf

0415      Chair Desk

0416      Chair Desk

0417      Chair

0418      Chair

0419      Chair

0420      Chair

0421      Desk

0422      BookShelf

0423      File Cabinet

0424      File Cabinet

0425      File Cabinet

0426      File Cabinet

0427      File Cabinet

0428      File Cabinet

0429      BookShelf

0430      BookShelf

0431      Chair

0432      Desk

0433      File Cabinet

0434      Chair

0435      File Cabinet

0436      Chair

0437      Desk

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0438      BookShelf

0439      Chair

0440      Bookshelf

0441      Refrigerator

0442      File Cabinet

0443      File Cabinet

0444      Computer Table

0445      Chair

0446      Chair

0447      File Cabinet

0448      BookShelf

0449      Desk

0450      Chair

0451      Desk

0452      BookShelf

0453      BookShelf

0454      Table

0455      Chair

0456      Chair

Maintenance Office

0457      Chair

0458      Desk

0459      File Cabinet

0460      Desk

0461      Chair

0462      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0463      Chair

0464      Chair

0465      BookShelf

0466      BookShelf

0467      BookShelf

0468      File Cabinet

0469      Desk

0470      File Cabinet

0471      Chair

0472      Desk

0473      Chair

0474      Chair

0475      Shelf

0476      Shelf

0477      File Cabinet

0478      File Cabinet

0479      File Cabinet

0480      Maintenance File Cabinet

0481      Chair

0482      Desk

0483      File Cabinet

0484      Desk (2 Piece)

0485      BookShelf

0486      Small Cabinet

0487      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0488      Table

0489      Table

0490      Chair

0491      Desk

0492      Upright Cabinet

0493      Upright Cabinet

0494      Desk

0495      File Cabinet

0496      Chair

0497      Desk

0498      Desk

0499      Maintenance Office Chair

0500      _________________________________________________________

0501      _________________________________________________________

0502      _________________________________________________________

0503      _________________________________________________________

0504      _________________________________________________________

0505      _________________________________________________________

0506      _________________________________________________________

0507      _________________________________________________________

0508      _________________________________________________________

0509      _________________________________________________________

0510      _________________________________________________________

0511      _________________________________________________________

0512      _________________________________________________________

<PAGE>

Fortra Fiber-Cement LLC

Office Equipment Listing

0712      _________________________________________________________

0713      _________________________________________________________

0714      _________________________________________________________

0715      _________________________________________________________

0716      _________________________________________________________

0717      _________________________________________________________

0718      _________________________________________________________

0719      _________________________________________________________

0720      _________________________________________________________

0721      _________________________________________________________

0722      _________________________________________________________

0723      _________________________________________________________

0724      _________________________________________________________

0725      _________________________________________________________

0726      _________________________________________________________

0727      _________________________________________________________

0728      _________________________________________________________

0729      _________________________________________________________

0730      _________________________________________________________

0731      _________________________________________________________

0732      Desk

0733      Chair

0734      Desk

0735      File Cabinet

0736      Book Case

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0737      File Cabinet

0738      Chair

0739      Chair

0740      Chair

0741      Book Case

0742      Book Case

0743      Chair

0744      Chair

0745      Table

0746      Plant Stand

0747      Chair

0748      File Cabinet

0749      File Cabinet

0750      File Cabinet

0751      Chair

0752      Chair

0753      _________________________________________________________

0754      _________________________________________________________

0755      _________________________________________________________

0756      _________________________________________________________

0757      _________________________________________________________

0758      _________________________________________________________

0759      _________________________________________________________

0760      _________________________________________________________

0761      _________________________________________________________

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0762      _________________________________________________________

0763      _________________________________________________________

0764      _________________________________________________________

0765      _________________________________________________________

0766      _________________________________________________________

0767      _________________________________________________________

0768      _________________________________________________________

0769      _________________________________________________________

0770      _________________________________________________________

0771      _________________________________________________________

0772      File Cabinet

0773      File Cabinet

0774      Chair

0775      Desk

0776      Chair

0777      Stool

Destack

0778      Chair

0779      Desk

0780      File Cabinet

0781      Desk

Finishing Office

0782      File Cabinet

0783      File Cabinet

0784      Chair

0785      Desk
<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0786      Table

0787      Label Stand

0788      Desk

0789      Chair

0790      Chair

0791      Computer Stand

0792      Desk

MCC Room

0793      Chair

0794      Desk

John White

0795      Desk

0796      Chair

0797      Credenza

0798      File Cabinet

0799      Book Case

0800      Chair

0801      Chair

Regina Office

0802      Desk (Wrap Around)

0803      Chair

0804      Desk

0805      File Cabinet

0806      Bookcase

0807      Chair

0808      Plant Stand

0809      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0810      Chair

0811      Table

0812      Chair

Ed Welch Office

0813      Desk

0814      Chair

0815      File Cabinet

0816      Chair

0817      Chair

0818      Chair

0819      Bookcase

0820      Chair

0821      Chair

0822      Table

0823      Chair

Del McLane's Office

0824      Chair

0825      Desk

0826      Chair

0827      Desk

0828      File Cabinet

0829      Bookcase

0830      File Cabinet

0831      Chair

0832      Chair

0833      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0834      Bookcase

0835      Bookcase

0836      Chair

0837      Chair

0838      Table

Russell Hill's Office

0839      Plant Stand

0840      Chair

0841      Desk

0842      File Cabinet

0843      File Cabinet

0844      File Cabinet

0845      Chair

0846      Chair

0847      Bookcase

0848      Bookcase

Front Office Conference Room

0849      Coffee Server Table

0850      Entertainment Center

0851      Conference Table

0852      Chair

0853      Chair

0854      Chair

0855      Chair

0856      Chair

0857      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0858      Chair

0859      Chair

0860      Chair

0861      Chair

0862      Chair

0863      Chair

0864      Chair

0865      Chair

Front Office Lobby

0866      Chair

0867      Chair

0868      Display Table(Server)

0869      Chair

0870      Chair

0871      Coffee Table

Reception Area Office

0872      Chair

0873      Desk

0874      File Cabinet

0875      File Cabinet

0876      File Cabinet

0877      Chair

0878      BookCase

0879      File Cabinet

0880      Chair

0881      Desk

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

Jeff Faganello Office

0882      Plant Stank

0883      Chair

0884      Chair

0885      File Cabinet

0886      Computer Desk

0887      Chair

0888      Desk

0889      Chair

0890      Chair

0891      Bookcase

0892      Coat Rack

0893      Chair

0894      Chair

0895      Table

Human Resource Office

0896      Chair

0897      Chair

0898      Credenza

0899      Bookcase

0900      File Cabinet

0901      File Cabinet

0902      File Cabinet

0903      Desk

0904      Chair

0905      Computer Center

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0906      Chair

0907      Chair

0908      Chair

0909      Chair

0910      Table

Office Supplies/copy room

0911      Labeling Stand

0912      Computer Stand

0913      Cabinet

0914      Cabinet

0915      Cabinet

0916      Cabinet

0917      File Cabinet

0918      File Cabinet

0919      Chair

0920      Rolling Table

0921      Table

0922      Table

David Seago's Office

0923      Bookcase

0924      Chair

0925      Chair

0926      File Cabinet

0927      Desk

0928      Lamp

0929      Chair

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0930      Bookcase

0931      File Cabinet

0932      Table

0933      Chair

0934      Chair

0935      Chair

0936      Chair

Ron Tews Office

0937      BookShelf

0938      Table

0939      Chair

0940      Chair

0941      Chair

0942      Chair

0943      Chair

0944      Chair

0945      Chair

0946      Chair

0947      Coat Rack

0948      File Cabinet

0949      Chair

0950      Lamp

0951      End Table

0952      BookShelf

0953      Plant Stand

<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0954      Lamp

0955      Lamp Stand

0956      Chair

0957      Desk

0958      Chair

0959      End Table

0960      Chair

Accounting Area

0961      File Cabinet

0962      File Cabinet

0963      File Cabinet

0964      File Cabinet

0965      Computer Cabinet

0966      Lamp

0967      File Cabinet

0968      Chair

0969      Desk

0970      Chair

0971      Chair

0972      BookCase

0973      Chair

0974      Desk

0975      Desk

0976      Chair

0977      File Cabinet

0978      Chair
<PAGE>

FORTRA FIBER-CEMENT, LLC

Office Equipment Listing

0979      Chair

0980      Desk

0981      Chair

0982      Table

0983      File Cabinet

0984      File Cabinet

0985      File Cabinet

0986      File Cabinet

0987      File Cabinet

0988      File Cabinet

Heath White's Office

0989      BookShelf

0990      Chair

0991      End Table

0992      Chair

0993      Desk

0994      Dry Erase Cabinet

0995      File Cabinet

0996      File Cabinet

0997      Credenza

0998      Plant Stand

0999      Chair

1000      Desk

<PAGE>

         MACHINERY & EQUIPMENT

SAND SLURRY SILO LEVEL CONTROL-LINE 1
SAND SLURRY DENSITY CONTROL-LINE 1
SAND SLURRY SILO AGITATOR "B"-LINE 1
SAND SLURRY SILO "B"LINE 1
SAND SLURRY PUMP-LINE 1
SAND SLURRY TANK (BAIL MILL OUTFEED)
SAND SLURRY PUMP (STANDBY)
SAND SLURRY HEADBOX
SAND SLURRY DENSITY CONTMILL O/F (WH # 2 QUOTE)
SAND SLURRY DENSITY CONT-MILL O/F (WH # 1 QUOTE)
SAND SLURRY PUMP (EXTRA)
SAND SLURRY PUMP
SAND MILL CHARGE
SAND SLURRY SCREEN (BAIL MILL OUTFEED)
SAND SLURRY SILO AGITATOR "A"-LINE 1
SAND MILL DRIVE
SAND MILL
SAND MILL CHARGE HOIST SYSTEM
SAND MILL FEEDER
SAND WEIGHING CON-VEYOR
SAND MILL CHARGING HOPPER
DISPERGING TANK PUMPLINE 2
WATER DOSING TANK-LINE 2
DISPERGING LEVEL CONTROL& VALVES-LINE 2
FIBER DISPERGING TNKLINE 2
FIBER FEED CONVEYOR "B"-LINE 2
FIBER FEED CONVEYOR "A"-LINE 2
FIBER SLURRY SILO "A"-LINE 2
FIBER SLURRY SILO "B"-LINE 2
TE FIBER SLURRY STORAGESILO PU
SAND SLURRY SILO "A"-LINE 2
FIBER SLURRY VALVES & LEVEL CONTROL-LINE 2
TE FIBER SLURRY SILO "A"-LIN
FIBER SLURRY STORAGESILOPUMP-LINE 2
FIBER SLURRY STORAGESILOAGITATOR "A"-LINE 2
TE FIBER SLURRY STORAGESILO AG
FIBER REFINER "B"-LINE 2
TE FIBER REFINER "B"-LINE 2
FIBER REFINER "A"-LINE 2
TE FIBER REFINER "A"-LINE 2
FIBER SLURRY PUMP "B"-LINE 2
FIBER SLURRY PUMP "A"-LINE 2
TE FIBER SLURRY PUMP "A"-LIN
TE FIBER SLURRY VALVES &LEVEL
SAND SLURRY SILO "A"LINE1
PRODUCTION TEST RUNS@ BGC
TE PRODUCTION TEST RUNS@BGC
BGC ON-SITE START-UPASSISTANCE
TE BGC ON-SITE START-UPASSISTA
BGC OPERATIONAL CON-SULTING FEES
TE BGC OPERATIONAL CON-SULTING
VENDOR ENGINEERING
TE VENDOR ENGINEERING
DISPERGING TANK PUMPLINE 1
WATER DOSING TANK LINE 1
<PAGE>
                                  Description

DISPERGING LEVEL CTL& VALVES LINE 1

FIBER DISPERGING TNKLINE1

FIBER FEED CONVEYOR "B" LINE 1

FIBER FEED CONVEYOR "A" LINE 1

FIBER SLURRY SILO"A"LINE1

FIBER SLURRY SILO"B"LINE1

FIBER SILO PUMP (STANDBY)

TE FIBER SILO PUMP (STANDB

TE FIBER SLURRY STORAGESILO "B

FIBER SLURRY VALVES & LEVEL CONTROL-LINE 1

TE FIBER SLURRY VALVES & LEVEL

FIBER SLURRY STORAGESILOPUMP-LINE 1

TE FIBER SLURRY STORAGESILO PU

FIBER SLURRY STORAGESILOAGITATOR "B"-LINE 1

TE FIBER SLURRY STORAGESILO AG

FIBER SLURRY STORAGESILOAGITATOR "A"-LINE 1

TE FIBER SLURRY SILO"A" LINE 1

FIBER SLURRY STORAGESILO"B"-LINE 1

FIBER SLURRY STORAGESILO"A"-LINE 1

TE FIBER SLURRY STORAGESILO "A

FIBER REFINER "B" LINE1

TE FIBER REFINER "B" LINE 1

FIBER REFINER "A" LINE1

TE FIBER REFINER "A" LINE 1

FIBER SLURRY PUMP"B"LINE1

FIBER SLURRY PUMP"A"LINE1

TE FIBER SLURRY PUMP"A"LINE1

TE FIBER SLURRY STORAGESILO AG

TE FIBER CONSISTENCY METER 1

FIBER CONSISTENCY METER 1

CAP INTEREST-PROD EQUIP (15 YR) UOP

CAP INTEREST-PROD EQUIP (2 YR) UOP

FIBER FLOW METER, LINE2

FIBER FLOW METER, LINE1

ELECTRICAL INSTALL- ATION

TE ELECTRICAL INSTALL- ATION

MECHANICAL INSTALLA-TION

TE MECHANICAL INSTALLA-TION

RECUPERATOR TANK "B"LINE2

TE RECUPERATOR TANK "B"LINE 2

RECUPERATOR TANK "A"LINE2

TE RECUPERATOR TANK "A"LINE 2

CEMENT DOSING SCREW -LINE 2

TE RECUPERATOR TANK "A"-LIN

ADDTIVE DOSING SCREW"B"-LINE2

RECUPERATOR TANK "B"-LINE 1

RECUPERATOR TANK "A"-LINE 1

ADDTIVE DOSING SCREW"B"-LINE 1

ADDTIVE DOSING SCREW"A"-LINE 1

CEMENT DOSING SCREW LINE1

CEMENT SILO DISCHARGER-LINE 1

CEMENT SILO-LINE 1

TE RECUPERATOR TANK "B"-LIN

CEMENT SILO-LINE 2

SAND SLURRY SILO LEVEL CONTROL-LINE 2

SAND SLURRY DENSITY CONTROL-LINE 2

SAND SLURRY PUMP -LINE 2

SAND SLURRY SILO AGITATOR "A"-LINE 2

ADDTIVE DOSING SCREW"A"-LINE 2

ADDITIVE "A" SILO (ALUMINA TRIHYDRATE)

ADDITIVE "B" SCALES W/CONTAINER & DISCHARGE SCREW

ADDITIVE "B" SILO (CALCIUM BENTONITE)

<PAGE>
                                  Description

ADDITIVE "A" SCALES W/CONTAINER & DISCHARGE SCREW

FIBER-CEMENT SLURRY PUMP"B"-LINE 2

FIBER-CEMENT SLURRY PUMP"A"-LINE 2

TURBOPULPER "B"- LINE2

TURBOPULPER "A"- LINE2

CEMENT BATCHER-LINE2

ADDITIVES BATCHER LINE2

FIBER SLURRY BATCHERLINE2

SAND SLURRY/WATER  BATCHER-LINE 2

HOMIGINIZED CONTROL VALVENTROL

METERING PUMP "A" -LINE 2 (SCOPE ADDITION)

HOMOGENIZER PUMP- LINE2

MECHANICAL INSTALLA-TION

TE MECHANICAL INSTALLA-TION

CONTROL VALVES & LVLCONTROLS-LINE 2

TE CONTROL VALVES & LVLCONTROL

FLOCCULANT DOSING PUMP-LINE 2

TE FLOCCULANT DOSING PUMP-L1

FLOCCULANT TANK "B"-LINE2

TE FLOCCULANT TANK "B"-LINE 2

STOCK CHEST "A"-LINE2

TE FLOCCULANT TANK 'A"-LINE 2

STOCK CHEST MIXR "A"-LINE 2

HOMOGENIZER-LINE 2

TE HOMOGENIZER-LINE 2

METERING PUMP "B" -LINE 2 (SCOPE ADDITION)

TE METERING PUMP "B" -LINE 2

STOCK CHEST MIXR "B"-LINE 2

TE STOCK CHEST MIXR "B"-LINE 2

STOCK CHEST "B"-LINE2

TE STOCK CHEST "B"-LINE2

FLOCCULANT TANK'A"-LINE2

TURBOPULPER "A"-LINE1

TE CONTROL SYS-LINE 2 (WH SUP

FIBER-CEMENT SLURRY PUMP "B" -LINE 1

TURBOPULPER "B"-LINE1

CEMENT BATCHER-LINE1

ADDITIVES BATCHER -LINE 1

FIBER SLURRY BATCHER-LINE 1

SAND SLURRY WATER BATCHER-LINE 1

STRUCTURAL STEEL

TE STRUCTURAL STEEL

EQUIPMENT FOUNDATION

TE EQUIPMENT FOUNDATION

FIBER-CEMENT SLURRY PUMP"A"-LINE 1

TE CONTROL SYS-LINE 1 (WH SUP
<PAGE>

                                  Description

STRUCTURAL STEEL

TE STRUCTURAL STEEL

EQUIPMENT FOUNDATION

TE EQUIPMENT FOUNDATION

ELECTRICAL INSTALLA-TION

TE ELECTRICAL INSTALLA-TION

CONTROL SYS-LINE 2 (WH SUPPLIED)

CONTROL SYS-LINE 1 (WH SUPPLIED)

TE 480 VOLT MCC-LINE 1

STOCK PRESS CONTROL SYSTEUPPLIED)

480 VOLT MCC-LINE 1

ELECTRICAL INSTALLA-TION

TE ELECTRICAL INSTALLA-TION

TE SEAL WATER PUMP LINE 1

CONTROL SYS-LINE 1 (WH SUPPLIED)

TE CONTROL SYS-LINE 1 (WH SUP

480 VOLT MCC-LINE 1

TE 480 VOLT MCC-LINE 1

SEAL WATER PUMP LINE 1

FORMING ROLLER-12 FLATLINE 1

TE FORMING ROLLER-12 FLAT LI

<PAGE>
                                  Description

CUTTING TOOL 9-1/2" LINE 1

TE CUTTING TOOL 9-1/2" LINE 1

CUTTING TOOL 7-1/2" LINE 1

TE CUTTING TOOL 7-1/2" LINE 1

TE 480 VOLT MCC-LINE 2

480 VOLT MCC-LINE 2

TE ELECTRICAL INSTALLA-TION

ELECTRICAL INSTALLA-TION

CONTROL SYS-LINE 2 (WH SUPPLIED)

TE CONTROL SYS-LINE 2 (WH SUP

480 VOLT MCC-LINE 2

TE 480 VOLT MCC-LINE 2

SEAL WATER PUMP LINE 2

TE SEAL WATER PUMP LINE 2

SHEET TAKE-OFF CONV "A"-LINE 2

FULL REJECT SHEET SHREDRLINE 2

TE FULL REJECT SHEET SHREDR LI

SHEETING MACHINE - LINE 2 (INCL 500M IN WH DISCOUNT)

TE SHEETING MACHINE SIEVE C

(VACUUM PUMP SYSTEM LINE 2 (WITH

TE SHEET TAKE-OFF CONV "A"-LIN

UNDERFLOW RETURN WATER PUMP-LINE 2

TE UNDERFLOW RETURN WATER PUMP

SIEVE WATER PUMP "B"-LINE 2 (STAND-BY)

<PAGE>
                                  Description

TE SIEVE WATER PUMP "B"-LINE 2

SIEVE WATER PUMP "A"-LINE 2

TE SIEVE WATER PUMP "A"-LINE 2

OVERFLOW PUMP-LINE 2

TE SHEETING MACHINE - LINE 2

VACUUM PUMP SYSTEM LINE2TH BASE)

SHEET MACHINE VARIBLMAINDRIVE-LINE 2

TE SHEET MACHINE VARIBLMAIN DR

FORMING ROLLER-12' FLATLINE 2

TE FORMING ROLLER-12' FLAT LI

FORMING ROLLER-16' FLATLINE 2

TE FORMING ROLLER-16' FLAT LI

SHEETING MACHINE SIEVE CYLINDERS-LINE 2 (SPARES)

TE SHEETING MACHINE SIEVE C

SHEETING MACHINE SIEVE CYLINDERS-LINE 2

TE OVERFLOW PUMP-LINE 2

FORMING ROLLER-16' FLATLINE 1

TE FORMING ROLLER-16' FLAT LI

TE FULL REJECT SHEET CNVYR 2

STACKER LIFT TABLE HPU 2

TE STACKER LIFT TABLE HPU 2

TE CUTTING PRESS-LINE 2(INC 1,

TE TROLLEY PUSHER "A"- LINE 2

CUT-OFFS TANK W/MIXR-LINE 2

TE CUT-OFFS TANK W/MIXR-LINE 2

CUT-OFFS CONVERSION AT PRESS-LINE 2

TE CUT-OFFS CONVERSION AT PRES

LIFTING TABLE FIBER SHEETS-LINE 2

TE LIFTING TABLE FIBER SHEETS-

LIFTING TABLE MIXED PILE-LINE 2

HOMOGIZED CUT-OFFS PUMP-L

TROLLEY PUSHER "A"- LINE 2

TE MECHANICAL ERECTION

STACKER PLANT LINE 2

TE STACKER PLANT LINE 2

VACUUM SUCTION UNIT-LINE 2

TE VACUUM SUCTION UNIT-LINE 2

CUTTING TOOL 9-1/2" LINE 2

TE CUTTING TOOL 9-1/2" LINE 2

CUTTING TOOL 7-1/2" LINE 2

TE CUTTING TOOL 7-1/2 LINE 2

TE LIFTING TABLE MIXED PILE-LI

HOMOGIZED CUT-OFFS PUMP-L

MECHANICAL ERECTION

ADDITIONAL PRESS TROLLEYS

TE CUT-OFFS DENSITY CONTROL LI

MECHANICAL ERRECTION

TE MECHANICAL ERRECTION
<PAGE>

                                  Description

TE AIR PIPING (PROCESS & INSTR

EQUIPMENT FOUNDATION

TE EQUIPMENT FOUNDATION

WASH DOWN WTR PIPING

TE WASH DOWN WTR PIPING

PROCESS LIQUID & SLURRY PIPING

AIR PIPING (PROCESS & INSTRUMENTATION)

TE PROCESS LIQUID & SLURRY

PROCESS LIQUID & SLURRY PIPING

AIR PIPING (PROCESS & INSTRUMENTATION)

TE AIR PIPING (PROCESS & INSTR

TRANSFORMER-1500 KVAINCOMING/480 VOLT

SWITCHGEAR-460 VOLT

TE SWITCHGEAR-460 VOLT

SWITCHGEAR-460 VOLT

TE SWITCHGEAR-460 VOLT

SWITCHGEAR-460 VOLT

TE SWITCHGEAR-460 VOLT

SWITCHGEAR-4160 VOLT

TE SWITCHGEAR-4160 VOLT

TE TRANSFORMER-1500 KVAINCOMIN

TE TRANSFORMER-1500 KVAINCOMIN

TRANSFORMER-1500 KVAINCOMING/480 VOLT

TE TRANSFORMER-1500 KVAINCOMIN

TE MAIN INCOMING SWITCHGEAR

TRANSFORMER-1500 KVAINCOMING/480 VOLT

TE CAPACITORS

SAFETY SIGNS & EQUIPMENT

TE SAFETY SIGNS & EQUIPMENT

TE SWITCHGEAR-460 VOLT

SEWER LIFT STATIONS

TE SEWER LIFT STATIONS

PROCESS WATER PIPING

TE PROCESS WATER PIPING

FIRE PROTECT PIPING

TE AIR PIPING

TE WASH DOWN WTR PIPING

CAPACITORS

AIR PIPING

TE FIRE PROTECT PIPING

SWITCHGEAR-460 VOLT

GAS PIPING

WASH DOWN WTR PIPING

MILL WATER PIPING

HYDRAULIC PIPING

TE HYDRAULIC PIPING

WASH DOWN WATER PIPING

SWITCHGEAR-480 VOLT

TE SWITCHGEAR-480 VOLT

TE EQUIPMENT FOUNDATION

WASH DOWWN WATER PIPING

TE WASH DOWWN WATER PIPING

WASH DOWWN WATER PIPING

TE WASH DOWWN WATER PIPING

PROCESS LIQUID & SLURRY PIPING-FIBER SLURRY

TE PROCESS LIQUID & SLURRY PIP

AIR PIPING (PROCESS & INSTRUMENTATION)

EQUIPMENT FOUNDATION

TE AIR PIPING (PROCESS & INSTR

STRUCTURAL STEEL

HYDRAULIC PIPING

TE HYDRAULIC PIPING

<PAGE>
                                  Description

DIRTY WATER SYS IMPROVE

SUPPLEMENT TO DIRTY WTRSYS IMPROVEMENT

TE AUTOCLAVES 1 DOOR  8' X 10

CONTROL SYSTEM LINE 1 (WH SUPPLIED)

TE CONTROL SYSTEM LINE 1(WH S

480 VOLT MCC

TE 480 VOLT MCC

TE CONTROL SYSTEM LINE 2(WH S

TE AUTOCLAVE CONTROL SYSTEM (L

AUTOCLAVE CONTROL SYSTEM(LINE # 1 )

ELECTRICAL INSTALLATION

TE ELECTRICAL INSTALLATION

AUTOCLAVE CONTROL SYSTEM(LINE # 2 )

TE AUTOCLAVE CONTROL SYSTEM (L

CONTROL SYSTEM LINE 2 (WH SUPPLIED)

CURING TUNNEL DOORS AND HARDWARE

STEAM BOILER PLANT - NATURAL GAS

TE STEAM BOILER PLANT - NATURA

TRANSFER CAR NO. 2

TE TRANSFER CAR NO. 2

TRANSFER CAR NO. 1

TE TRANSFER CAR NO. 1

TE TRANSPORT TROLLEYS

TE CURING TUNNEL DOORS AND HAR

CURING TUNNEL HEATING EQUIPMENT

TE CURING TUNNEL HEATINGEQUIP

TRANSPORT TROLLEYS

CONDENSATE COLLECTING SYSTEM

TE CONDENSATE COLLECTINGSYSTE

AUTOCLAVE DRAIN SYS

TE AUTOCLAVE DRAIN SYS

AUTOCLAVES 1 DOOR  8' X 105' @ 168PSI

EQUIPMENT FOUNDATION

RAIL TRACK SYSTEM

TE RAIL TRACK SYSTEM

CURING TUNNELS

TE CURING TUNNELS

TE EQUIPMENT FOUNDATION

CONDENSATE SUMP PUMP

CONDENSATE SUMP PUMP SPARE

CONDENSATE WASTE PUMP

AUTOCLAVE TROLLEYS-16'

VIBRATION ANALYSIS EQUIP

AUTOCLAVE PRESS TROLLEYS

TOOLS & UTENSILS AL-LOWANCE

TE TOOLS & UTENSILS AL-LOWANCE

TE SHOP EQUIPMENT AL- LOWANCE

CONDUIT BENDER
<PAGE>

                                  Description

AIR PIPING-PROC&INST

TE AIR PIPING-PROC&INST

EQUIPMENT FOUNDATION

TE STRUCTURAL STEEL

TE EQUIPMENT FOUNDATION

STRUCTURAL STEEL

WASH DOWN WATER PIPING

TE WASH DOWN WATER PIPING

PROCESS LIQUID & SLURRY PIPING

TE PROCESS LIQUID & SLURRY

AIR PIPING (PROCESS & INSTRUMENTATION)

TE AIR PIPING (PROCESS &INSTR

MIXED PILE LIFTING TABLELINE 2

MECHANICAL ERECTION

TE MECHANICAL ERECTION

DRY PRODUCT TRANSFER CARLINE 2

TE DRY PRODUCT TRANSFER CAR LI

TE SHEET LIFTING TABLE LINE 2

TE MIXED PILE LIFTING TABLE LI

DRY PROD TRANS CAR 1

TE DRY PROD TRANS CAR 1

SHEET LIFTING TABLE LINE2

WASH DOWN WATER PIPING

HEAT ENERGY PIPING

TE HEAT ENERGY PIPING

HYDRAULIC PIPING

TE HYDRAULIC PIPING

TE WASH DOWN WATER PIPING

AIR PIPING (PROCESS & INSTRUMENTATION)

TE AIR PIPING (PROCESS &INSTR

AIR RECEIVER # 2   INCLUDED W/130100

WATER TREATMENT/CON-DENSATE

TE WATER TREATMENT/CON-DENSATE

WATER TREATMENT/PRO-CESS

TE WATER TREATMENT/PRO-CESS

TE AIR RECEIVER # 2   INCLUDE

AIR RECEIVER # 1 INCLUDED W/130100

TE AIR RECEIVER # 1 INCLUDE

AIR DRYER 2 INCLUDED W/130100

TE AIR DRYER # 2 INCLUDE

AIR DRYER # 1 INCLUDED W/130100

TE AIR DRYER # 1 INCLUDE

AIR COMPRESSOR # 3

SHOP EQUIPMENT AL- LOWANCE

MAIN INCOMING SWITCHGEAR

EQUIPMENT INSTALLA- TION

TE EQUIPMENT INSTALLATION

TE AIR COMPRESSOR # 2

TE AIR COMPRESSOR # 3

AIR COMPRESSOR # 1

TE AIR COMPRESSOR # 1

TRUCK SCALES # 2

TRUCK SCALES # 1

<PAGE>

                                  Description

WATER STORAGE & CON-TAINMENT

TE WATER STORAGE & CON-TAINMEN

AIR COMPRESSOR # 2

PROCESS CONTROL SY- STEMINTEGRATION

TE PROCESS CONTROL SY- STEM IN

EMERGENCY GENERATOR-SET LINE 1

TE EMERGENCY GENERATOR-SET LIN

FIBER WASTE PUMP

TE FIBER WASTE PUMP

TE P.H. MIXER

DOCK LEVELER/BUMPER

PROCESS WTR SURGE TANK PUMP

TE PROCESS WTR SURGE TANK PUMP

DIRTY WATER SURFACE PUMP

TE DIRTY WATER SURFACE PUMP

TE DIRTY WATER SUMP PUMP

DIRTY WATER SUMP PUMP

HIGH PRESSURE WASHER

VACUUM PUMPS # 5

MILL WATER BOOSTER PUMP & CONTROL VALVE

WASTE WATER STOCK CHEST

WASTE WATER STOCK CHEST

SIEVE STORAGE & MAINTENANCE EQUIP-LINE 1

MACHINE LINE MCC

TE PANEL PRIMMING LINE HANDLIN

PANEL PRIMMIMG LINE PAINTING EQUIP.

PRIMING LINE CONTROL SYS

PANEL PRIMMING LINE HANDLING EQUIPMENT

COATING & PNEUMATIC LINEMCC

PNEUMATIC COATER

VERTICAL SUB PUMP

INFRA-RED PRE-HEAT OVEN CONV.

PAINTER LINE MCC-480 V

ROLL COATER

TE EQUIPMENT PAINTING

ELECTRICAL INSTALL- ATION

EQUIPMENT PAINTING

MECHANICAL ERECTION

<PAGE>

                                  Description

TE MECHANICAL ERECTION

PRIMER WK TNK&EQUIP

TE PRIMER WK TNK&EQUIP

PRIMER STG TNKS&EQUI

TE PRIMER STG TNKS&EQUI

TE ELECTRICAL INSTALL- ATION

TE PANEL PRIMMIMG LINE PAINTIN

BAR CODING EQUIPMENT

DRY PRODUCT SHEAR EQUIPMENT

TE DRY PRODUCT SHEAR EQUIPMENT

INK JET LABEL EQUIPMENT

TE BD BREAKER - REJ BD

TE REJ BD FEED CONVEYOR

LAB EQUIPMENT

TE LAB EQUIPMENT

LABORATORY PRESS AND MOULDS

EMPLOYEE TIME TRACKINGSYSTEM

<PAGE>

                                    COMPUTERS

<TABLE>
<CAPTION>
                           CPU          HDD
      Computer            Speed  RAM    Size           Network Card            CDROM     Sound Card        Modem           OS
<S>                        <C>  <C>    <C>    <C>                              <C>    <C>                <C>              <C>
Dell Inspiron 3200         266   80MB    5GB  BreezeCom Wireless LAN ver 2.0          Crystal PNP Audio                   Win98
Dell Inspiron 3200         266   80MB    5GB  BreezeCom Wireless LAN ver 2.0          Crystal PNP Audio                   Win98
Dell Inspiron 3000         166   32MB    2GB                                                                              Win95
Dell Dimension V350        350   64MB    8GB  3Com Fast EtherLink XL            Yes   DS-XG Wave                          WinNT
Dell Dimension V350        350   64MB    8GB  3Com Fast EtherLink XL            Yes   DS-XG Wave                          WinNT
Dell Dimension V350        350   64MB    8GB  3Com Fast EtherLink XL            Yes   DS-XG Wave                          WinNT
Dell Dimension V350        350   64MB    8GB  3Com Fast EtherLink XL            Yes                                       WinNT
Dell Inspiron 3200         266   80MB    6GB  3Com MegaHertz 10/100 PC Card     Yes   CS4236/37/38       MegaHertz 56K    Win98
Dell Inspiron 3200         266   80MB    6GB  BreezeCom Wireless LAN ver 2.0          Crystal PNP Audio                   Win98
Clone                            32MB  2.5GB  NE2000                            Yes                                       Win95
Dell Dimension XPS R400    400   64MB    4GB  3Com Fast EtherLink PCI 10/100    Yes                                       WinNT
Dell Inspiron 7000         266   96MB    6GB  3Com MegaHertz 10/100 PC Card     DVD   Maestro MPU401     Psion Dacom 56K  Win98
Dell Dimension XPS D300    300   32MB    6GB  3Com Fast EtherLink XL 10/100MB   Yes                                       Win95
HP NetServer LH Pro 6/200  200  128MB  6x4GB
Dell Diminson XPS R400     400
</TABLE>

                                    PRINTERS

<TABLE>
<CAPTION>
                                                      Serial
     Make                       Model                 Number
<S>                        <C>                      <C>
Canon                      BJC-6000
Hewlett Packard            LaserJet 6P              USCC049336
Hewlett Packard            DeskJet 820Cse           SG69S180RQ
Hewlett Packard            LaserJet 8000
Hewlett Packard            LaserJet 5SI
Hewlett Packard            LaserJet 2100
Hewlett Packard            LaserJet 5P
Hewlett Packard            DeskJet 1600C
Hewlett Packard            DeskJet 722C             US86A15046
Hewlett Packard            LaserJet 6P
Xerox                      DC332
</TABLE>

Macintosh HD:Desktop Folder:Fortra Fiber computer and pri.d
<PAGE>

                                    VEHICLES

<TABLE>
<CAPTION>
       Make and Model                    Vehicle Identification Number
<S>                                      <C>
1997 Chevrolet Silverado 1500 Pickup           1GCEC19R7VE138245
   1999 Dodge Grand Caravan                    1B4GP44G8XB629414
</TABLE>

                               TELECOMM EQUIPMENT

                  3COM 3C16406 SuperStack II PS Hub 40 - 24 port

                  Belkin 10ft LAN RJ45 VL5 cable

                  Belkin 10ft RJ11 straight thru cable

                  APC 600 UPS

                  Ingram Micro External 33.6 Modem

                  Ingram Micro RMW-4MAU 19" Wall Mount Rack

                  Curtis SP700 6-Outlet surge protector

                               MOBILE EQUIPMENT *

<TABLE>
<CAPTION>
              Equipment                         Model Number    Serial Number
<S>                                             <C>             <C>
Broderson Carryback Crane                          IC-200       85186
Caterpillar Integrated Tool Carrier
  (Frontend Loader)                                IT24F        4NN01077
Yale Forklift                                      GLP060       E177B17781U
Yale Forklift                                      GLP060       E177B17804U
Yale Forklift                                     GLP060T       A875B04466W
Taylor Forklift                                    THD160       27455
Taylor Forklift                                    THD160       27456
Taylor Forklift                                    THD160       27457
Taylor Forklift                                   THD250S       25417
Taylor Forklift                                   THD250S       27461
Taylor Forklift                                    THD160       28494
Taylor Forklift                                    THD160       28495
Genie Manlift Boom                                 Z60-34       1549
</TABLE>

*upon purchase by Landlord pursuant to respective leases therefor

Macintosh HD:Desktop Folder:Fortra Fiber computer and pri.d
<PAGE>

                                    EXHIBIT C

                                    GUARANTY

      THIS GUARANTY is made as of the 6th day of October, 2000 by JAMES HARDIE
NV, a Netherlands corporation ("Guarantor"), having an office at 26300 La
Alameda, Suite 100, Mission Viejo, California 92691, in favor of FORTRA
FIBER-CEMENT L.L.C., a Delaware limited liability ("Landlord"), with respect to,
in consideration of, and as inducement for, the leasing to JAMES HARDIE BUILDING
PRODUCTS, INC., a Nevada corporation ("Tenant"), of which Guarantor is the sole
owner, of certain premises and personal property (the "Premises") located in
Waxahachie, Ellis County, Texas, pursuant to that certain Industrial Building
Lease (as such may be amended, restated, supplemented, extended, renewed or
otherwise modified from time to time, the "Lease") dated as of even date
herewith between Landlord and Tenant.

      1. Guarantor hereby unconditionally and irrevocably guarantees to
Landlord, its successors and/or assigns (a) the full and prompt payment of all
Rent (as defined in the Lease) and all other sums payable by Tenant under the
Lease in accordance with its terms (including sums that would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C. Section 362(a)) and (b) the full and prompt performance of all other
obligations owed by Tenant pursuant to the Lease (the payment of Rent and all
other obligations referred to in clauses (a) and (b) are hereinafter referred to
as the "Obligations"). If Tenant shall fail to pay or perform any Obligation as
required pursuant to the terms of the Lease, then, irrespective of any defense
or any right of set-off, credit or claim that Guarantor may have against
Landlord, Guarantor shall forthwith upon demand by Landlord pay or perform such
Obligation.

      2. This Guaranty is absolute, unconditional and irrevocable.
Notwithstanding (a) any agreement or stipulation between Landlord and Tenant or
their successors or assigns extending the time of performance or modifying any
of the terms, covenants or conditions contained in the Lease on the part of
Tenant to be performed, (b) any renewal or extension of the Lease, either
pursuant to an option granted in the Lease or otherwise, (c) any waiver by or
failure of Landlord to enforce any of the terms, covenants or conditions
contained in the Lease or any of the terms, covenants or conditions contained in
any modifications thereof, (d) any assignment of the Lease or any subletting of
all or any part of the Premises, (e) any holdover by Tenant beyond the term of
the Lease, (f) any consent, indulgence or other action, inaction or omission
under or in respect of the Lease, or (g) any bankruptcy, insolvency,
reorganization, arrangement, assignment for the benefit of creditors,
receivership or trusteeship affecting Tenant or Landlord or their respective
successors or assigns whether or not notice thereof is given to Guarantor,
Guarantor shall continue to be liable under this Guaranty. No such agreement,
stipulation, waiver or failure shall impair the obligations hereunder of
Guarantor and such obligations shall be and remain in full force and effect.

      3. The liability of Guarantor under this Guaranty shall be an absolute,
direct, immediate and unconditional guaranty of payment and performance and not
of collectibility, and shall not be conditional or contingent upon the
genuineness, validity, regularity or enforceability of the Lease or other
documents or instruments relating to the obligations hereby guaranteed or the
pursuit by Landlord of any remedies Landlord may have.

<PAGE>

      4. Guarantor hereby waives (a) diligence, presentment, demand of payment
and protest; (b) all notices to Guarantor, Tenant or any other person (whether
of nonpayment, termination, acceptance of this Guaranty, default under the Lease
or any other matters relating to the Lease, the Premises or related matters,
whether or not referred to herein, and including any and all notices of the
creation, renewal, extension, modification or accrual of any obligations
contained in the Lease) and (c) all demands whatsoever. Guarantor agrees that
its obligations hereunder shall not be affected by any circumstances which might
otherwise constitute a legal or equitable discharge of a guarantor or surety.

      5. No failure or delay on the part of Landlord in exercising any right,
power or privilege under this Guaranty shall operate as a waiver of or otherwise
affect any such right, power or privilege nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

      6. Any notice or demand of Guarantor from or by Landlord, its successors
or assigns, shall be delivered to Guarantor in the manner prescribed for the
delivery of notices in the Lease at the address indicated in the first paragraph
of this Guaranty, or such other address as Guarantor shall furnish in writing to
Landlord. Nothing contained in this Paragraph 6 shall be deemed to require
Landlord to give any notice to Guarantor, Tenant or any other Person.

      7. This Guaranty may be enforced by Landlord without the necessity at any
time of resorting to or exhausting any other security or collateral and without
the necessity at any time of having recourse to the remedy provisions of the
Lease or otherwise, and Guarantor hereby waives the right to require Landlord to
proceed against Tenant, to exercise its rights and remedies under the Lease, or
to pursue any other remedy or enforce any other right at law or in equity.
Nothing herein contained shall prevent Landlord from suing on the Lease or from
exercising any other rights available to it under the Lease, and the exercise of
any of the aforesaid rights shall not constitute a legal or equitable discharge
of Guarantor. Guarantor understands that the exercise by Landlord of certain
rights and remedies contained in the Lease may affect or eliminate Guarantor's
right of subrogation against Tenant and that Guarantor may therefor incur
partially or totally nonreimbursable liability hereunder, nevertheless Guarantor
hereby authorizes and empowers Landlord to exercise in its sole discretion, any
rights and remedies, or any combination thereof, which may then be available, it
being the purpose and intent of Guarantor that its obligations hereunder shall
be absolute, independent and unconditional under any and all circumstances.

      8. Whenever Guarantor shall make any payment to Landlord hereunder on
account of any liability hereunder, Guarantor shall notify Landlord in writing
that such payment is made under this Guaranty for such purpose. It is understood
that Landlord, without impairing this Guaranty, may, subject to the terms of the
Lease, apply payments from Tenant or from any reletting of the Premises upon an
uncured default by Tenant, to any due and unpaid Rent or other charges or to
such other obligations owed by Tenant to Landlord pursuant to the Lease in such
order as Landlord, in its sole and absolute discretion, determines.

      9. Until the Obligations shall have been indefeasibly paid in full,
Guarantor shall withhold exercise of (a) any right of subrogation against
Tenant, (b) any right of contribution

                                      -2-
<PAGE>

Guarantor may have against any other guarantor of the Obligations, (c) any right
to enforce any remedy which Landlord now has or may hereafter have against
Tenant or (d) any benefit of, and any right to participate in, any security now
or hereafter held by Landlord. Guarantor further agrees that, to the extent the
waiver of its rights of subrogation and contribution as set forth herein is
found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation Guarantor may have against Tenant or against
any collateral or security, and any rights of contribution Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
Landlord may have against Tenant, to all right, title and interest Landlord may
have in any such collateral or security, and to any rights Landlord may have
against such other guarantor. Landlord may use, sell or dispose of any item of
collateral or security as it sees fit without regard to any subrogation rights
Guarantor may have, and upon any such disposition or sale any rights of
subrogation Guarantor may have shall terminate. If any amount shall be paid to
Guarantor on account of any such subrogation rights at any time when all
Obligations shall not have been paid in full, such amount shall be held in trust
for Landlord and shall forthwith be paid over to Landlord to be credited and
applied against the Obligations, whether matured or unmatured, in accordance
with the terms of the Lease or any applicable security agreement.

      10. Subject to the rights of any creditors of Guarantor, any indebtedness
of Tenant now or hereafter held by Guarantor is hereby subordinated in right of
payment to the Obligations and any such indebtedness of Tenant to Guarantor
collected or received by Guarantor shall be held in trust for Landlord and shall
forthwith be paid over to Landlord to be credited and applied against the
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.

      11. This Guaranty is a continuing guaranty and shall remain in effect
until all of the Obligations shall have been indefeasibly paid in full and
Tenant shall have no further Obligations under, pursuant to, or in connection
with, the Lease.

      12. This Guaranty shall continue in full force and be binding upon
Guarantor and its successors and assigns.

      13. This Guaranty shall inure to the benefit of Landlord and its
successors and assigns.

      14. Guarantor agrees that it will, at any time and from time to time,
within ten (10) business days following written request by Landlord, execute,
acknowledge and deliver to Landlord or to such persons as Landlord may direct, a
statement certifying that this Guaranty is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as modified and stating such modifications). Guarantor agrees that such
certificates may be relied on by any person holding or proposing to acquire any
interest in the Lease.

      15. Guarantor shall pay all reasonable attorneys' fees, charges and
expenses and all other reasonable costs and expenses which are incurred in the
enforcement of this Guaranty whether or not any action or proceeding is actually
commenced by Landlord against Guarantor or prosecuted to judgment.

                                      -3-
<PAGE>

      16. All rights, duties, benefits, and privileges arising hereunder shall
be construed according to the laws of the State of Texas.

      17. To the extent that Guarantor has now or may hereafter acquire such,
Guarantor hereby irrevocably waives in respect of its obligations under this
Guaranty, immunity from the jurisdiction of any court (including, but not
limited to, the courts of the United States or any State thereof) and immunity
of its revenues, assets, or properties (whether commercial or noncommercial)
from execution upon, attachment in aid of execution upon, and attachment prior
to, a judgment of any such court, and from any other legal process or action
taken in connection with this Guaranty, and Guarantor agrees that the foregoing
waivers of immunity shall have effect under and be construed in accordance with
the Foreign Sovereign Immunities Act of 1976 of the United States, as the same
may be amended from time to time.

      18. Every provision of this Guaranty is intended to be severable. If any
term or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of this
Guaranty.

      19. (a) So long as any Obligation could arise or remains outstanding,
Guarantor shall not, without the prior written consent of Landlord, commence or
join with any other person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Tenant. The obligations of Guarantor under
this Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Tenant or by any defense which Tenant may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.

      (b) Guarantor acknowledges and agrees that any interest on any portion of
the Obligations which accrues after the commencement of any proceeding referred
to in clause (a) above (or, if interest on any portion of the Obligations ceases
to accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Obligations if said
proceedings had not been commenced) shall be included in the Obligations because
it is the intention of Guarantor and Landlord that the Obligations which are
guarantied by Guarantor pursuant to this Guaranty should be determined without
regard to any rule of law or order which may relieve Tenant of any portion of
such Obligations by reason of such proceedings referred to in clause (a).
Guarantor will permit any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person to pay Landlord, or
allow the claim of Landlord in respect of, any such interest accruing after the
date on which such proceeding is commenced.

      (c) In the event that all or any portion of the Obligations are paid by
Tenant, the obligations of Guarantor hereunder shall continue and remain in full
force and effect or be reinstated, as the case may be, in the event that all or
any part of such payment(s) are rescinded or recovered directly or indirectly
from Landlord as a preference, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute Obligations for
all purposes under this Guaranty.

                                      -4-
<PAGE>

      20. Guarantor acknowledges and agrees that all disputes arising, directly
or indirectly, out of or relating to this Guaranty, and all actions to enforce
this Guaranty, may be dealt with and adjudicated in the courts of the State of
Texas or the Federal courts sitting in the State of Texas; and hereby expressly
and irrevocably submits the person of Guarantor to the jurisdiction of such
courts in any suit, action or proceeding arising, directly or indirectly, out of
or relating to this Guaranty. So far as is permitted under the applicable law,
this consent to personal jurisdiction shall be self-operative and no further
instrument or action, other than service of process in a manner permitted by
law, shall be necessary in order to confer jurisdiction upon the person of
Guarantor in any such court. Guarantor irrevocably agrees that service of any
and all process in any such suit, action or proceeding in any such court may be
effected by mailing a copy thereof by registered or certified mail, postage
prepaid, to it at its address as specified in the preamble of this Guaranty.
Such service is hereby acknowledged, agreed, accepted and consented to by
Guarantor to be good, sufficient, effective and binding service in every respect

      21. Provided that service of process is effected upon Guarantor as
provided above or in any other manner permitted by law, Guarantor irrevocably
waives, to the fullest extent permitted by law, and agrees not to assert, by way
of motion, as a defense or otherwise, (a) any objection which it may have or may
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in such a court as is mentioned in the previous paragraph, (b) any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum, or (c) any claim that it is not personally
subject to the jurisdiction of the above-named courts. Provided that service of
process is effected upon Guarantor as provided above or in any other manner
permitted by law, Guarantor agrees that final judgment from which Guarantor has
not appealed or may not appeal or further appeal in any such suit, action or
proceeding brought in such a court of competent jurisdiction shall be conclusive
and binding upon Guarantor and, may so far as is permitted under the applicable
law, be enforced in the courts or any state or any Federal court and in any
other courts to the jurisdiction of which Guarantor is subject, by a suit upon
each judgment and that Guarantor will not assert any defense, counterclaim or
set off in any such suit upon such judgment.

      22. The obligations of Guarantor under this Guaranty shall not be
discharged by an amount paid in currency other than U.S. Dollars, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to U.S. Dollars under normal banking procedures does not yield the
amount of U.S. Dollars due hereunder. If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in U.S. Dollars into
another currency (the "Second Currency"), the rate of exchange which shall be
applied shall be that at which in accordance with normal banking procedures
Landlord could purchase U.S. Dollars with the Second Currency on the business
day next preceding that on which such judgment is rendered. The obligation of
Guarantor in respect of any such sum due from it to Landlord hereunder shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the business day following
receipt by Guarantor of any sum adjudged to be due hereunder in the Second
Currency to Landlord, Landlord may in accordance with normal banking procedures
purchase U.S. Dollars with the amount of the Second Currency so adjudged to be
due; and Guarantor hereby, as a separate obligation and notwithstanding any such
judgment, agrees to indemnify Landlord against, and to

                                      -5-
<PAGE>

pay Landlord on demand in U.S. Dollars, any difference between the sum
originally due to Landlord in U.S. Dollars and the amount of U.S. Dollars so
purchased and transferred.

      23. Guarantor shall furnish to Landlord (a) as soon as available, and in
any event within sixty (60) days after the close of each fiscal quarter
accounting period of Guarantor, a copy of the balance sheet of Guarantor as of
the last day of such period, in reasonable detail showing in comparative form
the figures for the corresponding date and period in the previous fiscal year,
and certified to by its president, chief financial officer or treasurer; and (b)
as soon as available, and in any event within one hundred twenty (120) days
after the close of each annual accounting period of Guarantor, a copy of the
balance sheet of Guarantor as of the last day of the period then ended, and
accompanying notes thereto, in reasonable detail showing in comparative form the
figures for the previous fiscal year, accompanied by an unqualified opinion
thereon of a firm of independent public accountants of recognized national
standing, selected by Guarantor and satisfactory to Landlord, to the effect that
the financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") and present fairly in accordance with
GAAP the financial condition of Guarantor as of the close of such fiscal year
and the results of its operations for the fiscal year then ended, and that an
examination of such accounts in connection with such financial statements has
been made in accordance with generally accepted auditing standards and,
accordingly, such examination included such tests of the accounting records and
such other auditing procedures as were considered necessary in the
circumstances.

      24. Guarantor agrees to execute, deliver and file all such further
instruments as may be necessary under the laws of the State of Texas in order to
make effective (a) the consent of Guarantor to the jurisdiction of the courts of
the State of Texas and the Federal courts sitting in the State of Texas and (b)
the other provisions of this Guaranty.

      25. Nothing in this Guaranty shall affect the right of Landlord to serve
process in any manner permitted by law or limit the right of Landlord or any of
its successors or assigns, to bring proceedings against Guarantor in the courts
of any jurisdiction or jurisdictions.

      26. Guarantor may not assign this Guaranty without the prior written
consent of Landlord which consent may be withheld, conditioned or delayed in
Landlord's sole discretion.

                                      -6-
<PAGE>

      IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.

                                     JAMES HARDIE NV, a Netherlands corporation

                                     By:________________________________________
                                                    Peter Macdonald,
                                                    Managing Director

                                     By:________________________________________
                                                    Phillip Morley,
                                                    Managing Director

                                      -7-
<PAGE>

                                    EXHIBIT D

                                    GUARANTY

      THIS GUARANTY is made as of the 6th day of October, 2000 by TEMPLE-INLAND
FOREST PRODUCTS CORPORATION, a Delaware corporation ("Guarantor"), having an
office at 303 South Temple Drive, Diboll, Texas 75941, in favor of JAMES HARDIE
BUILDING PRODUCTS, INC., a Nevada corporation ("Tenant"), with respect to, in
consideration of, and as inducement for, the leasing by Tenant of certain
premises and personal property (the "Premises") located in Waxahachie, Ellis
County, Texas, from FORTRA FIBER-CEMENT L.L.C., a Delaware limited liability
company ("Landlord"), of which the majority interests are owned by Guarantor,
pursuant to that certain Industrial Building Lease (as such may be amended,
restated, supplemented, extended, renewed or otherwise modified from time to
time, the "Lease") dated as of even date herewith between Landlord and Tenant.

      1. Guarantor hereby unconditionally and irrevocably guarantees to Tenant,
its successors and/or assigns the full and prompt payment and performance of all
obligations owed by Landlord pursuant to the Lease (the "Obligations"). If
Landlord shall fail to pay or perform any Obligation as required pursuant to the
terms of the Lease, then, irrespective of any defense or any right of set-off,
credit or claim that Guarantor may have against Tenant, Guarantor shall
forthwith upon demand by Tenant pay or perform such Obligation.

      2. This Guaranty is absolute, unconditional and irrevocable.
Notwithstanding (a) any agreement or stipulation between Tenant and Landlord or
their successors or assigns extending the time of performance or modifying any
of the terms, covenants or conditions contained in the Lease on the part of
Landlord to be performed, (b) any renewal or extension of the Lease, either
pursuant to an option granted in the Lease or otherwise, (c) any waiver by or
failure of Tenant to enforce any of the terms, covenants or conditions contained
in the Lease or any of the terms, covenants or conditions contained in any
modifications thereof, (d) any sale or transfer of the Premises, (e) any
consent, indulgence or other action, inaction or omission under or in respect of
the Lease, or (f) any bankruptcy, insolvency, reorganization, arrangement,
assignment for the benefit of creditors, receivership or trusteeship affecting
Landlord or Tenant or their respective successors or assigns whether or not
notice thereof is given to Guarantor, Guarantor shall continue to be liable
under this Guaranty. No such agreement, stipulation, waiver or failure shall
impair the obligations hereunder of Guarantor and such obligations shall be and
remain in full force and effect.

      3. The liability of Guarantor under this Guaranty shall be an absolute,
direct, immediate and unconditional guaranty of payment and performance and not
of collectibility, and shall not be conditional or contingent upon the
genuineness, validity, regularity or enforceability of the Lease or other
documents or instruments relating to the obligations hereby guaranteed or the
pursuit by Tenant of any remedies Tenant may have.

      4. Guarantor hereby waives (a) diligence, presentment, demand of payment
and protest; (b) all notices to Guarantor, Landlord or any other person (whether
of nonpayment, termination, acceptance of this Guaranty, default under the Lease
or any other matters relating to the Lease, the Premises or related matters,
whether or not referred to herein, and including any and all notices of the
creation, renewal, extension, modification or accrual of any obligations

<PAGE>

contained in the Lease) and (c) all demands whatsoever. Guarantor agrees that
its obligations hereunder shall not be affected by any circumstances which might
otherwise constitute a legal or equitable discharge of a guarantor or surety.

      5. No failure or delay on the part of Tenant in exercising any right,
power or privilege under this Guaranty shall operate as a waiver of or otherwise
affect any such right, power or privilege nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

      6. Any notice or demand of Guarantor from or by Tenant, its successors or
assigns, shall be delivered to Guarantor in the manner prescribed for the
delivery of notices in the Lease at the address indicated in the first paragraph
of this Guaranty, or such other address as Guarantor shall furnish in writing to
Tenant. Nothing contained in this Paragraph 6 shall be deemed to require Tenant
to give any notice to Guarantor, Landlord or any other Person.

      7. This Guaranty may be enforced by Tenant without the necessity at any
time of resorting to or exhausting any other security or collateral and without
the necessity at any time of having recourse to the remedy provisions of the
Lease or otherwise, and Guarantor hereby waives the right to require Tenant to
proceed against Landlord, to exercise its rights and remedies under the Lease,
or to pursue any other remedy or enforce any other right at law or in equity.
Nothing herein contained shall prevent Tenant from suing on the Lease or from
exercising any other rights available to it under the Lease, and the exercise of
any of the aforesaid rights shall not constitute a legal or equitable discharge
of Guarantor. Guarantor understands that the exercise by Tenant of certain
rights and remedies contained in the Lease may affect or eliminate Guarantor's
right of subrogation against Landlord and that Guarantor may therefore incur
partially or totally nonreimbursable liability hereunder; nevertheless Guarantor
hereby authorizes and empowers Tenant to exercise in its sole discretion, any
rights and remedies, or any combination thereof, which may then be available, it
being the purpose and intent of Guarantor that its obligations hereunder shall
be absolute, independent and unconditional under any and all circumstances.

      8. Whenever Guarantor shall make any payment to Tenant hereunder on
account of any liability hereunder, Guarantor shall notify Tenant in writing
that such payment is made under this Guaranty for such purpose.

      9. Until the Obligations shall have been indefeasibly paid in full,
Guarantor shall withhold exercise of (a) any right of subrogation against
Landlord, (b) any right of contribution Guarantor may have against any other
guarantor of the Obligations, (c) any right to enforce any remedy which Tenant
now has or may hereafter have against Landlord or (d) any benefit of, and any
right to participate in, any security now or hereafter held by Tenant. Guarantor
further agrees that, to the extent the waiver of its rights of subrogation and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation Guarantor may
have against Landlord or against any collateral or security, and any rights of
contribution Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Tenant may have against Landlord, to all
right, title and interest Tenant may have in any such collateral or security,
and to any rights Tenant may have

                                      -2-
<PAGE>

against such other guarantor. Tenant may use, sell or dispose of any item of
collateral or security as it sees fit without regard to any subrogation rights
Guarantor may have, and upon any such disposition or sale any rights of
subrogation Guarantor may have shall terminate. If any amount shall be paid to
Guarantor on account of any such subrogation rights at any time when all
Obligations shall not have been paid in full, such amount shall be held in trust
for Tenant and shall forthwith be paid over to Tenant to be credited and applied
against the Obligations, whether matured or unmatured, in accordance with the
terms of the Lease or any applicable security agreement.

      10. Subject to the rights of any creditors of Guarantor, any indebtedness
of Landlord now or hereafter held by Guarantor is hereby subordinated in right
of payment to the Obligations and any such indebtedness of Landlord to Guarantor
collected or received by Guarantor shall be held in trust for Tenant and shall
forthwith be paid over to Tenant to be credited and applied against the
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.

      11. This Guaranty is a continuing guaranty and shall remain in effect
until all of the Obligations shall have been indefeasibly paid in full and
Landlord shall have no further Obligations under, pursuant to, or in connection
with, the Lease.

      12. This Guaranty shall continue in full force and be binding upon
Guarantor and its successors and assigns.

      13. This Guaranty shall inure to the benefit of Tenant and its successors
and assigns.

      14. Guarantor agrees that it will, at any time and from time to time,
within ten (10) business days following written request by Tenant, execute,
acknowledge and deliver to Tenant or to such persons as Tenant may direct, a
statement certifying that this Guaranty is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as modified and stating such modifications). Guarantor agrees that such
certificates may be relied on by any person holding or proposing to acquire any
interest in the Lease.

      15. Guarantor shall pay all reasonable attorneys' fees, charges and
expenses and all other reasonable costs and expenses which are incurred in the
enforcement of this Guaranty whether or not any action or proceeding is actually
commenced by Tenant against Guarantor or prosecuted to judgment

      16. All rights, duties, benefits, and privileges arising hereunder shall
be construed according to the laws of the State of Texas.

      17. To the extent that Guarantor has now or may hereafter acquire such,
Guarantor hereby irrevocably waives in respect of its obligations under this
Guaranty, immunity from the jurisdiction of any court (including, but not
limited to, the courts of the United States or any State thereof) and immunity
of its revenues, assets, or properties (whether commercial or noncommercial)
from execution upon, attachment in aid of execution upon, and attachment prior
to, a judgment of any such court, and from any other legal process or action
taken in connection

                                      -3-
<PAGE>

with this Guaranty, and Guarantor agrees that the foregoing waivers of immunity
shall have effect under and be construed in accordance with the Foreign
Sovereign Immunities Act of 1976 of the United States, as the same may be
amended from time to time.

      18. Every provision of this Guaranty is intended to be severable. If any
term or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of this
Guaranty.

      19. (a) So long as any Obligation could arise or remains outstanding,
Guarantor shall not, without the prior written consent of Tenant, commence or
join with any other person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Landlord. The obligations of Guarantor
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Landlord or by any defense which Landlord may have by reason
of the order, decree or decision of any court or administrative body resulting
from any such proceeding.

      (b) Guarantor acknowledges and agrees that any interest on any portion of
the Obligations which accrues after the commencement of any proceeding referred
to in clause (a) above (or, if interest on any portion of the Obligations ceases
to accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Obligations if said
proceedings had not been commenced) shall be included in the Obligations because
it is the intention of Guarantor and Tenant that the Obligations which are
guarantied by Guarantor pursuant to this Guaranty should be determined without
regard to any rule of law or order which may relieve Landlord of any portion of
such Obligations by reason of such proceedings referred to in clause (a).
Guarantor will permit any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person to pay Tenant, or allow
the claim of Tenant in respect of, any such interest accruing after the date on
which such proceeding is commenced.

      (c) In the event that all or any portion of the Obligations are paid by
Landlord, the obligations of Guarantor hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from Tenant as a preference, fraudulent transfer or otherwise, and
any such payments which are so rescinded or recovered shall constitute
Obligations for all purposes under this Guaranty.

      20. Guarantor acknowledges and agrees that all disputes arising, directly
or indirectly, out of or relating to this Guaranty, and all actions to enforce
this Guaranty, may be dealt with and adjudicated in the courts of the State of
Texas or the Federal courts sitting in the State of Texas; and hereby expressly
and irrevocably submits the person of Guarantor to the jurisdiction of such
courts in any suit, action or proceeding arising, directly or indirectly, out of
or relating to this Guaranty. So far as is permitted under the applicable law,
this consent to personal jurisdiction shall be self-operative and no further
instrument or action, other than service of process in a manner permitted by
law, shall be necessary in order to confer jurisdiction upon the person of
Guarantor in any such court. Guarantor irrevocably agrees that service of any
and all process in

                                      -4-
<PAGE>

any such suit, action or proceeding in any such court may be effected by mailing
a copy thereof by registered or certified mail, postage prepaid, to it at its
address as specified in the preamble of this Guaranty. Such service is hereby
acknowledged, agreed, accepted and consented to by Guarantor to be good,
sufficient, effective and binding service in every respect.

      21. Provided that service of process is effected upon Guarantor as
provided above or in any other manner permitted by law, Guarantor irrevocably
waives, to the fullest extent permitted by law, and agrees not to assert, by way
of motion, as a defense or otherwise, (a) any objection which it may have or may
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in such a court as is mentioned in the previous paragraph, (b) any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum, or (c) any claim that it is not personally
subject to the jurisdiction of the above-named courts. Provided that service of
process is effected upon Guarantor as provided above or in any other manner
permitted by law, Guarantor agrees that final judgment from which Guarantor has
not appealed or may not appeal or further appeal in any such suit, action or
proceeding brought in such a court of competent jurisdiction shall be conclusive
and binding upon Guarantor and, may so far as is permitted under the applicable
law, be enforced in the courts or any state or any Federal court and in any
other courts to the jurisdiction of which Guarantor is subject, by a suit upon
each judgment and that Guarantor will not assert any defense, counterclaim or
set off in any such suit upon such judgment.

      22. Guarantor shall furnish to Tenant (a) as soon as available, and in any
event within sixty (60) days after the close of each fiscal quarter accounting
period of Guarantor, a copy of Form 10-Q filed with the U.S. Securities and
Exchange Commission by the parent company of Guarantor as of the last day of
such period; and (b) as soon as available, and in any event within one hundred
twenty (120) days after the close of each annual accounting period of Guarantor,
a copy of Form 10-K filed with the U.S. Securities and Exchange Commission by
the parent company of Guarantor as of the last day of the period then ended.

      23. Guarantor agrees to execute, deliver and file all such further
instruments as may be necessary under the laws of the State of Texas in order to
make effective (a) the consent of Guarantor to the jurisdiction of the courts of
the State of Texas and the Federal courts sitting in the State of Texas and (b)
the other provisions of this Guaranty.

      24. Nothing in this Guaranty shall affect the right of Tenant to serve
process in any manner permitted by law or limit the right of Tenant or any of
its successors or assigns, to bring proceedings against Guarantor in the courts
of any jurisdiction or jurisdictions.

      25. Guarantor may not assign this Guaranty without the prior written
consent of Tenant which consent may be withheld, conditioned or delayed in
Tenant's sole discretion.

      26. Guarantor agrees not to sell or transfer its ownership interest in
Landlord to any entity not affiliated with Tenant which engages in the
manufacture of fiber-cement products.

                                      -5-
<PAGE>

      IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.

                                         TEMPLE-INLAND FOREST PRODUCTS
                                           CORPORATION, a Delaware corporation

                                         By: _________________________________
                                            Name: ____________________________
                                            Title: ___________________________

                                      -6-
<PAGE>

                                    EXHIBIT E

                                     FORM OF
                      JAMES HARDIE BUILDING PRODUCTS, INC.
                          CONFIDENTIALITY UNDERTAKING

YOUR NAME AND TITLE:              ______________________________________________
(Please print)

ORGANIZATION:                     ______________________________________________
(Name in Full)

ADDRESS:                          ______________________________________________

                                  ______________________________________________

                                  ______________________________________________

                          ACKNOWLEDGMENT AND AGREEMENT

      In consideration of being granted access to a site operated by James
Hardie Building Products Inc. or any of its affiliated or related companies
(together and respectively, the "Company") I provide the following undertaking
on behalf of myself and my organization.

      I acknowledge that during my access to the Company's site, the Company may
disclose to me Confidential Information. I acknowledge that the Company is only
prepared to grant me access to Company site on the condition that I agree to
keep any such Confidential Information confidential. I agree to do so on the
terms contained in this undertaking.

                               TERMS OF DISCLOSURE

      "Confidential Information" includes information concerning quality
systems, product formulations and properties, production processes and
materials, machinery and its configurations, engineering designs and drawings,
testing methods and results, research projects, business information and plans,
and customer and supplier identities and my association with the Company, any
other information treated or identified as confidential by the Company or of an
inherently confidential nature, including but not limited to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

- Signatory and Witness to Initial in margin ___________________________________
            (please summarise all disclosed Confidential Information beyond
             that defined in the text printed above)

that is disclosed to me by the Company in the course of my access to the
Company's site and any record of the Confidential Information made by me or my
organization. Notwithstanding the

<PAGE>

foregoing, Confidential Information does not include information which (a) was
in the possession of or known by me or my organization prior to disclosure by
the Company, or (b) is, or through no fault of me or my organization becomes,
generally known to the trade or the public.

      I will take all action necessary to maintain the confidential nature of
the Confidential Information. I will not disclose or publish or permit
disclosure or publication of any of the Confidential Information to any person
(except a person whose access to the Company's site is permitted by that certain
Industrial Building Lease dated October ______, 2000 by and between the Company
as tenant and Fortra Fiber-Cement L.L.C. as landlord and also has executed a
similar Confidentiality Undertaking for the benefit of the Company) or for any
purpose other than those persons and purposes which have been disclosed to and
approved by the Company in writing or as otherwise expressly permitted
hereunder.

      I will also:

            (a) limit the disclosure of the Confidential Information to such of
      my officers, employees, agents, attorneys or advisers who reasonably
      require such information and in such cases require them to be equally
      bound by the conditions of this undertaking; and

            (b) return immediately to the Company all Confidential Information
      when requested to do so by the Company at any time.

      Confidential Information may be disclosed if required by law or legally
binding order or subpoena of a court, government or governmental agency
providing that only the minimum Confidential Information required to be
disclosed to comply with the applicable law or order is disclosed. I agree to
give the Company reasonable prior notice of any such disclosure at 26300 La
Alameda, Suite 100, Mission Viejo, California 92691, or any other address of
which I am informed in writing, so that the Company shall have a reasonable
opportunity to protect its interest in such Confidential Information.

      The obligations of confidentiality in this undertaking continue to apply
to me until I obtain a release in writing from the Company or until the
information ceases to be Confidential Information as indicated above.

      I acknowledge and agree to be bound by the above terms.

      I also give this Confidentiality Undertaking on behalf of my organization
and I have the authority to bind my organization in this regard. (Strike out
this sentence if the signatory does not have the necessary authority.)

                                      -2-
<PAGE>

      The Company shall have all rights and remedies available at law or in
equity in the event of any violation of this Confidentiality Undertaking.

                                               SIGNED:

                                               _________________________________
                                               (Signature)

                                               Date: ___________________________

                                      -3-
<PAGE>

                                   EXHIBIT "F"

1.    Broderson Carryback Crane, Model No. IC-200, Serial #85186

2.    Caterpillar Integrated Tool Carrier (Frontend Loader), Model No. IT24F,
      Serial #4NN01077

3.    Yale Forklifts:

      (a)   Yale Forklift, Model No. GLP060, Serial #E177B17781U

      (b)   Yale Forklift, Model No. GLP060, Serial #E1-77B17804U

      (c)   Yale Forklift, Model No. GLP060T, Serial #A875B04466W

4.    Taylor Forklifts:

      (a)   Taylor Forklift, Model No. THD160, Serial #27455

      (b)   Taylor Forklift, Model No. THD160, Serial #27456

      (c)   Taylor Forklift, Model No. THD160, Serial #27457

      (d)   Taylor Forklift, Model No. THD250S, Serial #25417

      (e)   Taylor Forklift, Model No. THD250S, Serial #27461

      (f)   Taylor Forklift, Model No. THD160, Serial #28494

      (g)   Taylor Forklift, Model No. THD160, Serial #28495

5.    Genie Manlift Boom, Model No. Z60-34, Serial #1549<PAGE>

                                                                    EXHIBIT 4.26

================================================================================

                            ASSET PURCHASE AGREEMENT
                                 BY AND BETWEEN

                      JAMES HARDIE BUILDING PRODUCTS, INC.

                                       AND

                                 CEMPLANK, INC.

                          DATED AS OF DECEMBER 12, 2001

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>                                                                                         <C>
ARTICLE I        DEFINITIONS...........................................................       1

     1.1      Definitions..............................................................       1

     1.2      Interpretation...........................................................       7

ARTICLE II       SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS........       8

     2.1      Purchased Assets.........................................................       8

     2.2      Assignment of Contracts..................................................       9

     2.3      Excluded Assets..........................................................      10

     2.4      Assumed Obligations......................................................      12

     2.5      Excluded Obligations.....................................................      12

ARTICLE III      PURCHASE PRICE AND PAYMENT............................................      13

     3.1      Payment of Purchase Price................................................      13

     3.2      Closing Date Balance Sheet...............................................      14

     3.3      Allocation of Consideration..............................................      15

ARTICLE IV       REPRESENTATIONS AND WARRANTIES OF SELLER..............................      15

     4.1      Due Incorporation; Subsidiaries..........................................      16

     4.2      Due Authorization........................................................      16

     4.3      Consents and Approvals; Authority Relative to this Agreement.............      16

     4.4      Financial Statements; Undisclosed Liabilities............................      17

     4.5      No Adverse Effects or Changes............................................      17

     4.6      Title to Properties......................................................      18

     4.7      Condition of Assets......................................................      18

     4.8      Real Property............................................................      18

     4.9      Equipment................................................................      19

     4.10     Inventories..............................................................      19

     4.11     Accounts Receivable; Advances............................................      20

     4.12     Intellectual Property....................................................      20

     4.13     Contracts................................................................      20

     4.14     Permits..................................................................      21

     4.15     Insurance................................................................      21
</TABLE>

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>                                                                                         <C>
     4.16     Employment and Labor Matters.............................................      21

     4.17     Capital Improvements.....................................................      22

     4.18     Taxes....................................................................      22

     4.19     No Defaults or Violations................................................      22

     4.20     Environmental Matters....................................................      23

     4.21     Litigation...............................................................      24

     4.22     Customers and Suppliers..................................................      24

     4.23     Sufficiency of Assets....................................................      24

ARTICLE V        REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................      24

     5.1      Due Incorporation........................................................      24

     5.2      Due Authorization........................................................      25

     5.3      Consents and Approvals; Authority Relative to this Agreement.............      25

     5.4      Litigation...............................................................      25

     5.5      Independent Investigation................................................      26

     5.6      Fair Market Value........................................................      26

     5.7      Transaction Structure....................................................      26

ARTICLE VI       COVENANTS.............................................................      26

     6.1      Implementing Agreement...................................................      26

     6.2      Consents and Approvals...................................................      26

     6.3      Trademarks...............................................................      26

     6.4      Brokers..................................................................      27

     6.5      Preservation of Books and Records; Access................................      27

     6.6      Employees; Employee Benefit Plans........................................      28

     6.7      Purchaser's Access to Information........................................      28

     6.8      Trademark "Cemplank".....................................................      28

     6.9      Interim Services.........................................................      28

     6.10     Confidentiality..........................................................      28

     6.11     Software.................................................................      29

     6.12     Access Easement..........................................................      29
</TABLE>

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>                                                                                         <C>
ARTICLE VII      CLOSING...............................................................      30

     7.1      Closing..................................................................      30

     7.2      Deliveries by Seller.....................................................      30

     7.3      Deliveries by Purchaser..................................................      31

ARTICLE VIII     INDEMNIFICATION.......................................................      32

     8.1      Survival.................................................................      32

     8.2      Indemnification by Seller................................................      33

     8.3      Indemnification by Purchaser.............................................      33

     8.4      Limitations on Liability.................................................      33

     8.5      Claims ..................................................................      34

     8.6      Notice of Third Party Claims; Assumption of Defense......................      36

     8.7      Settlement or Compromise.................................................      37

     8.8      Time Limits..............................................................      37

     8.9      Knowledge................................................................      37

     8.10     Net Losses and Subrogation...............................................      37

     8.11     Purchase Price Adjustments...............................................      38

ARTICLE IX       MISCELLANEOUS.........................................................      38

     9.1      Expenses.................................................................      38

     9.2      Amendment................................................................      38

     9.3      Notices..................................................................      38

     9.4      Payments in Dollars......................................................      39

     9.5      Waivers..................................................................      39

     9.6      Assignment...............................................................      39

     9.7      Third Party Beneficiaries................................................      40

     9.8      Publicity................................................................      40

     9.9      Further Assurances.......................................................      40

     9.10     Severability.............................................................     .40

     9.11     Entire Understanding.....................................................      40

     9.12     Language.................................................................      41

     9.13     Applicable Law...........................................................      41
</TABLE>

                                     -iii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                            PAGE
<S>                                                                                         <C>
     9.14     Remittances..............................................................      41

     9.15     Bulk Sales...............................................................      41

     9.16     Jurisdiction of Disputes; Waiver of Jury Trial...........................      42

     9.17     Schedules................................................................      42

     9.18     Disclaimer of Warranties.................................................      42

     9.19     Counterparts.............................................................      42
</TABLE>

                                      -iv-

<PAGE>

EXHIBITS

Exhibit A            Assignment and Assumption Agreement
Exhibit B            Form of Bill of Sale
Exhibit C            Form of Guarantee Agreement
Exhibit D            Form of Know-How License and Technical Support Agreement
Exhibit E            Intentionally Omitted
Exhibit F-1          Form of Opinion of Mayer, Brown & Platt
Exhibit F-2          Form of Opinion of Stevens & Lee
Exhibit F-3          Form of Opinion of Hubert Debout
Exhibit G            Form of Opinion of Patton Boggs LLP and the form of Opinion
                     of McDonald Carano Wilson McCune Bergin Frankovich &
                     Hicks LLP
Exhibit H            Form of Special Warranty Deed
Exhibit I            Form of Trademark and Patent Assignment
Exhibit J            Form of Side Letter

SCHEDULES

Schedule 1.1A        Financial Statements
Schedule 1.1B        Seller's Knowledge
Schedule 2.1(a)      Non-Commercial Real Property
Schedule 2.1(b)      Purchased Equipment
Schedule 2.1(f)      Owned Intellectual Property
Schedule 2.1(h)      Deposits, Rebates, Warranties
Schedule 2.1(i)      Vehicles
Schedule 2.2(a)      Personal Property Leases
Schedule 2.2(b)      Customer Contracts
Schedule 2.2(c)      Supply Contracts
Schedule 2.2(d)      Intellectual Property Licenses
Schedule 2.2(e)      Other Contracts
Schedule 2.3(o)      Other Excluded Assets
Schedule 2.4(e)      Other Assumed Liabilities
Schedule 3.2         Closing Date Balance Sheet Principles
Schedule 4.1         Foreign Qualifications; Subsidiaries
Schedule 4.3         Consents and Approvals; Authority
Schedule 4.4         Financial Statements; Undisclosed Liabilities
Schedule 4.5         Adverse Effects or Changes
Schedule 4.6         Title to Properties
Schedule 4.7         Condition of Assets
Schedule 4.8(a)      Excluded Real Property
Schedule 4.8(b)      Non-Commercial Real Property
Schedule 4.9         Equipment
Schedule 4.10        Inventories
Schedule 4.11        Accounts Receivable
Schedule 4.12        Intellectual Property
Schedule 4.13        Contracts

                                       v

<PAGE>

Schedule 4.14        Permits
Schedule 4.15        Insurance
Schedule 4.16        Employment and Labor Matters
Schedule 4.17        Capital Improvements
Schedule 4.19        No Defaults or Violations
Schedule 4.20        Environmental Matters
Schedule 4.20(b)     Environmental Permits
Schedule 4.21        Litigation
Schedule 4.22        Customers and Suppliers
Schedule 5.3         Consents and Approvals; Authority
Schedule 5.7         Transaction Structure
Schedule 8.2         Severance Agreements

                                       vi

<PAGE>

                            ASSET PURCHASE AGREEMENT

      THIS ASSET PURCHASE AGREEMENT is made as of the 12th day of December,
2001, by and between JAMES HARDIE BUILDING PRODUCTS, INC., a corporation
organized under the laws of the State of Nevada ("Purchaser"), and Cemplank,
Inc., a corporation formed under the laws of the Commonwealth of Pennsylvania
("Seller"). Certain capitalized terms used herein are defined in Article I.

                              W I T N E S S E T H:

      WHEREAS, Purchaser wishes to purchase from Seller, and Seller wishes to
sell to Purchaser, all of the Purchased Assets, and Purchaser desires to assume
from Seller, and Seller desires to assign to Purchaser, all of the Assumed
Obligations, all upon the terms and subject to the conditions contained herein.

      NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained,
Purchaser and Seller agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

      1.1 Definitions. The following terms shall have the following meanings for
the purposes of this Agreement:

      "Accounting Firm" shall have the meaning set forth in Section 3.2(b).

      "Accounts Receivable" shall have the meaning set forth in Section 2.1(d).

      "Affiliate" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person. The term "control" as used in the
preceding sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, 50% or more of the voting rights attributable to the
shares of such corporation, or with respect to any Person other than a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person.

      "Agreement" shall mean this Asset Purchase Agreement, including all
Exhibits and Schedules hereto, as it may be amended, modified or supplemented
from time to time in accordance with its terms.

     "Asset Acquisition Statement" shall have the meaning set forth in Section
3.3(a).

     "Assets" shall mean the Purchased Assets and the Leased Assets.

      "Assignment and Assumption Agreement" shall mean an assignment and
assumption agreement between Purchaser and Seller to be executed and delivered
at the Closing and in the form attached hereto as Exhibit A.

<PAGE>

      "Assumed Obligations" shall have the meaning set forth in Section 2.4,
except that any reference to "Assumed Obligations as of June 30, 2001" shall
mean all liabilities of Seller that would fall within the definition of Assumed
Obligations had the Closing occurred on June 30, 2001.

      "Bill of Sale" shall mean a bill of sale of Seller to be executed and
delivered at the Closing and in the form attached hereto as Exhibit B.

      "Business" means all of the business and operations of Seller in Blandon,
Pennsylvania and Summerville, South Carolina, which relate to the manufacture,
sale, distribution and export of Products (as defined in the Know-How License
and Technical Support Agreement) by Seller.

      "Business Day" shall mean any day of the year other than (i) any Saturday
or Sunday or (ii) any other day on which banks located in London, England or New
York, New York generally are closed for business.

      "Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article VII.

      "Closing Date" shall mean the date hereof.

      "Closing Date Balance Sheet" shall have the meaning set forth in Section
3.2(a).

      "Code" shall mean the United States Internal Revenue Code of 1986, as
amended.

      "Contract" shall mean any contract, lease, sales order, purchase order,
agreement, indenture, mortgage, note, bond, warrant or instrument.

      "Conversion Agreement" shall mean the Agreement as to Conversion of FILOT
Lease to FILOT Contracts and Assignment and Assumption of FILOT Contract entered
into as of December 11, 2001 by and among Purchaser, Seller and Dorchester
County, a body politic and corporate and subdivision of the State of South
Carolina.

      "Customer Contract" shall have the meaning set forth in Section 2.2(b).

      "Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.

      "Enforceability Limitations" shall have the meaning set forth in Section
4.2.

      "Environmental Claim" shall mean any claim, demand, cause of action,
judgment or litigation made or brought against Seller relating to the violation
of any Environmental Law or Environmental Permit relating to the ownership or
use of the Purchased Assets (including the Non-Commercial Real Property) or the
Excluded Real Property based on facts or events occurring prior to the Closing
Date.

      "Environmental Law" shall mean any Law, each as in effect on the date
hereof, that imposes liability or standards of conduct concerning discharges,
emissions, releases or

                                        2
<PAGE>

threatened releases of noises, odors or any Hazardous Substances, whether as
matter or energy, into ambient air, water or land (including into surface water,
ground water, wetlands, landfills, drinking water, storage tanks, underground
storage tanks, solid waste, waste water, storm water runoff, waste emissions or
wells or open dumps), as well as, any Law governing pollution and protection of
the environment, or otherwise relating to the presence, manufacture, labeling,
testing, processing, discharge, release, threatened release, control or
processing, generation, distribution, use, treatment, storage, disposal,
investigation, cleanup, transport or handling of Hazardous Substances, or any
other wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls or radiation, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, as amended, the Clean Water Act of 1977, as amended, and any so-called
"Superfund" or "Superlien" Law (including those already referenced in this
definition).

      "Environmental Permit" shall mean any Permit required by or pursuant to
any applicable Environmental Law.

      "Environmental Warranty" shall mean a representation or warranty in
Section 4.20.

      "Equipment" shall have the meaning set forth in Section 2.1(b).

      "Eureka Agreement" shall mean that certain Trademark License Agreement
dated May 21, 1997 by and between Seller (formerly known as F.C.P., Inc.) and
Eureka S.A. de C.V.

      "Excluded Assets" shall have the meaning set forth in Section 2.3.

      "Excluded Obligations" shall have the meaning set forth in Section 2.5.

      "Excluded Real Property" shall mean the parcels of land set forth on
Schedule 4.8 (other than the Non-Commercial Real Property) together with any and
all privileges and easements appurtenant thereto and all buildings and other
structures and improvements (other than the Equipment) situated or located
thereon or attached thereto which were owned and used by Seller prior to the
Closing Date in the operation of the Business and are being leased to Purchaser
concurrently with the Closing.

      "Excluded Technology" shall have the meaning set forth in the Know-How
License and Technical Support Agreement.

      "FILOT Lease" shall mean that certain Lease Purchase Agreement dated
December 31, 2000 between Dorchester County, South Carolina and Seller, as the
same may be amended or modified from time to time.

      "Financial Statements" shall mean the audited financial statements of
Seller as of December 31, 2000 and the unaudited financial statements of Seller
as of June 30, 2001, all of which are included in Schedule 1.1 A, consisting of
the balance sheets at such dates and the

                                        3
<PAGE>

related statements of earnings and retained earnings and cash flows for the
periods ended on such dates.

      "Governmental Authority" shall mean the government of the United States or
any foreign country or any state or political subdivision thereof or any entity,
body or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

      "Guarantee Agreement" shall mean a guarantee agreement between
International Building Materials, S.A. and Purchaser to be executed and
delivered at the Closing and in the form attached as Exhibit C.

      "Hazardous Substances" shall mean all toxic, explosive or radioactive
substances or wastes, petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, and any of the
following: (i) any 'hazardous substances,' as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
et seq.; (ii) any 'extremely hazardous substance,' 'hazardous chemical' or
'toxic chemical,' each as defined under the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Sections 11001 et seq.; (iii) any 'hazardous
waste,' as defined under the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; (iv)
any 'pollutant,' as defined under the Clean Water Act, 33 U.S.C. Sections 1251
et seq.; (v) any 'hazardous materials' as defined in the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., as amended, and regulations
promulgated thereunder; (vi) any 'chemical substance or mixture' as defined in
the Toxic Substances Control Act, 15 U.S.C. Section 2061 et seq., as amended,
and regulations promulgated thereunder and (vii) any regulated substance or
waste under any Environmental Law.

      "Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article VIII.

      "Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
VIII.

      "Information and Records" shall have the meaning set forth in Section
2.1(e).

      "Intellectual Property" shall mean all United States and foreign patents
(including continuations, continuations-in-part, reissues and re-examinations
thereof) and patent applications; registered and unregistered trade names,
trademarks, service names and service marks (and applications for registration
of the same); copyrights and copyright registrations (and applications for the
same); and domain names and all applications therefor.

      "Intellectual Property Licenses" shall have the meaning set forth in
Section 2.2(d).

      "Inventory" shall have the meaning set forth in Section 2.1(c).

      "June 30 Balance Sheet" shall have the meaning set forth in Section
3.2(a).

                                        4
<PAGE>

      "Know-How" shall have the meaning set forth in the Know-How License and
Technical Support Agreement.

      "Know-How License and Technical Support Agreement" shall mean the know-how
license and technical support agreement among Seller, Redco S.A., Manasco S.A.
and Purchaser to be executed and delivered at the Closing and in the form
attached hereto as Exhibit D.

      "Know-How Warranties" shall mean the representations and warranties made
by Redco S.A., Manasco S.A. and/or Seller in the Know-How License and Technical
Support Agreement.

      "Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree, judgment, decision or governmental requirement enacted, promulgated or
imposed by any Governmental Authority.

      "Leased Assets" shall mean all assets leased to Seller pursuant to any of
the Personal Property Leases.

      "Liability" shall mean any debt, claim, obligation or liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due).

      "Licensed Intellectual Property" shall have the meaning set forth in
Section 4.12.

      "Lien" shall mean any lien (except for any lien for Taxes not yet due and
payable), mortgage, pledge, security interest or other encumbrance.

      "Loss" or "Losses" shall mean any and all losses, liabilities, costs,
claims, damages and expenses, and shall also include Losses actually suffered by
Purchaser as a result of the successful prosecution of a claim by the purchaser
of all or substantially all of the assets of Purchaser arising from a breach of
or inaccuracy in any of the representations or warranties set forth herein or in
any Related Agreement.

      "Major Customer" shall have the meaning set forth in Section 4.22(a)(i).

      "Major Supplier" shall have the meaning set forth in Section 4.22(a)(ii).

      "Net Book Value Deficiency" shall mean (a) the amount (if any) by which
the Purchased Assets less the Assumed Obligations (the "Net Acquired Assets"),
as shown on the Closing Date Balance Sheet, is less than (b) the Net Acquired
Assets as shown in the June 30 Balance Sheet.

      "Net Book Value Excess" shall mean (a) the amount (if any) by which the
Net Acquired Assets, as shown on the Closing Date Balance Sheet, is greater than
(b) the Net Acquired Assets as shown in the June 30 Balance Sheet.

      "Non-Commercial Real Property" shall mean those parcels of land set forth

and identified as such on Schedule 2.1(a) together with any and all
privileges and easements appurtenant thereto and all buildings, facilities,
installations and other structures, improvements, and fixtures situated or
located thereon or attached thereto.

                                        5
<PAGE>

      "Ordinary Course of Business" shall mean the conduct of the Business by
Seller in the ordinary course and as established over the two years prior to the
Closing Date.

      "Owned Intellectual Property" shall have the meaning set forth in Section
2.1(f).

      "Parties" shall mean Seller and Purchaser, each individually referred to
herein as a "Party."

      "Permit" shall mean any permit, license, approval or other authorization
required or granted by any Governmental Authority for any and all aspects of the
operations of the Business.

      "Permitted Liens" shall mean (i) Liens for Taxes that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with U.S. GAAP;
(ii) workers', mechanics', materialmen's, repairmen's, suppliers', carriers' or
similar Liens (a) arising in the Ordinary Course of Business with respect to
obligations that are not yet delinquent or (b) that are being contested in good
faith by appropriate proceedings and, in the case of clause (b), for which
adequate reserves have been established in accordance with U.S. GAAP; and (iii)
those Liens set forth in Schedule 4.6 and designated as "Permitted Liens".

      "Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association
or other entity.

      "Personal Property Lease" shall have the meaning set forth in Section
2.2(a).

      "Product Support" shall have the meaning set forth in Section 2.4(c).

      "Purchase Price" shall mean (i) the amount payable by Purchaser under
Section 3.1(b), less (ii) any amount payable by Seller under Section 3.1(c)(i).
plus (iii) any amount payable by Purchaser under Section 3.1(c)(ii).

      "Purchased Assets" shall have the meaning set forth in Section 2.1, except
that any reference to the "Purchased Assets as of June 30, 2001" shall mean all
assets of Seller that would fall within the definition Purchased Assets had the
Closing occurred on June 30, 2001.

      "Purchased Contracts" shall have the meaning set forth in Section 2.2.

      "Purchaser" shall have the meaning set forth in the preamble to this
Agreement.

      "Purchaser's Employees" shall have the meaning set forth in Section 6.6.

      "Real Property" means the Excluded Real Property and the Non-Commercial
Real Property.

      "Related Agreements" shall mean the Assignment and Assumption Agreement,
Bill of Sale, Guarantee Agreement, Know-How License and Technical Support
Agreement, Side Letter and all exhibits, schedules, instruments and other
documents attached thereto or contemplated

                                        6
<PAGE>

thereby. The Related Agreements executed by a specified Person shall be referred
to as "such Person's Related Agreements," "its Related Agreements" or another
similar expression.

      "Seller" shall have the meaning set forth in the preamble to this
Agreement.

      "Seller's knowledge", or any similar expression with regard to the
knowledge or awareness of or receipt of notice by Seller, means the actual,
direct and personal knowledge, which was or would have been obtained after
reasonable inquiry, of any of the Persons listed in Schedule 1.1B.

      "Side Letter" shall mean a side letter agreement between Purchaser and
International Building Materials, S.A. to be executed and delivered at the
Closing and in the form attached hereto as Exhibit J.

      "Supply Contract" shall have the meaning set forth in Section 2.2(c).

      "Tax Return" shall mean any report, return or other information required
to be supplied to a Governmental Authority in connection with any Taxes.

      "Tax Statute of Limitations Date" shall mean the close of business on the
45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).

      "Tax Warranty" shall mean a representation or warranty in Section 4.18.

      "Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments (including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, goods and services, value added, stamp, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits,
severance, payroll, unemployment and Social Security taxes) which are imposed by
any Governmental Authority, and such term shall include any interest, penalties
or additions to tax attributable thereto.

      "Title and Authorization Warranty" shall mean a representation or warranty
contained in Section 4.1(a), 4.2, 5.1, 5.2 or 5.5 or the first sentence of
Section 4.6 hereof.

      "Transferable Permit" shall have the meaning provided in Section 2.2.

      "U.S. GAAP" shall mean United States generally accepted accounting
principles at the time in effect.

      1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's

                                        7
<PAGE>

successors and assigns to the extent such successors and assigns are permitted
by the terms of any applicable agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or individually.
Reference to any agreement (including this Agreement), document or instrument
means such agreement, document or instrument as amended or modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof. Underscored references to Articles, Sections,
paragraphs, clauses, Exhibits or Schedules shall refer to those portions of this
Agreement. The use of the terms "hereunder," "hereof," "hereto" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Article, Section, paragraph or clause of, or Exhibit or Schedule to,
this Agreement. In the event of a direct conflict in the terms of this Agreement
and any of the Related Agreements, the terms of this Agreement shall control.

                                   ARTICLE II

         SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS

      2.1 Purchased Assets. Except as provided in Section 2.3 and subject to the
other terms and conditions of this Agreement and the Related Agreements, at the
Closing, Seller shall sell, assign, convey, transfer and deliver to Purchaser,
and Purchaser shall purchase and acquire from Seller and take assignment and
delivery from Seller of, all of Seller's right, title and interest in and to all
of the assets, rights and Business of Seller as a going concern as of the
Closing Date, of whatever kind or nature and wherever situated or located and
whether reflected on Seller's books and records or previously written-off or
otherwise not reflected on such books and records, in each case, that are owned
by Seller, including the following:

            (a) Non-Commercial Real Property. All Non-Commercial Real Property;

            (b) Equipment. All equipment, machinery, appliances, furniture,
      draperies and curtains, computer hardware, tools, spare parts and other
      items of tangible personal property (including any of the foregoing which
      has been fully depreciated), other than the Inventory (collectively, the
      "Equipment"), including the Equipment listed on Schedule 2.1(b);

            (c) Inventory. All inventory, including materials and raw materials,
      work in progress, finished goods, service parts and supplies and parts
      which have historically been expensed or have not been valued on Seller's
      books and records, supplies, and other inventories as of the Closing Date
      (collectively, the "Inventory");

            (d) Accounts Receivable. All accounts receivable, trade receivables,
      notes receivable and other receivables which are payable as a result of
      goods sold or services provided (or which will be sold or provided) by
      Seller prior to the Closing ("Accounts Receivable");

            (e) Information and Records. All books, records, files, databases,
      plans, specifications, blueprints, repair and operating manuals, warranty
      and maintenance records, information regarding assessments, copies of
      information regarding insurance, marketing and promotional material,
      technical information, price lists, sales records,

                                        8
<PAGE>

      copies of plans and designs of buildings and structures, plans and designs
      of fixtures and equipment, copies of Real Property records and
      environmental control and monitoring records, customer and prospective
      customer lists, customer records and information, drawings, accounts
      receivable and payable records, maintenance and asset history records,
      ledgers, registers, books of original entry, OSHA and EPA files and
      records of Seller pertaining to the Business, and copies of any and all
      non-confidential documents, correspondence or materials relating to the
      Excluded Obligations and Excluded Assets (collectively, the "Information
      and Records"); provided that Seller shall be entitled to retain copies of
      the Information and Records delivered to Purchaser hereunder; provided
      further that Seller shall retain the original information regarding
      insurance and shall provide copies to Purchaser;

            (f) Intellectual Property. All Intellectual Property, including the
      Intellectual Property listed on Schedule 2.1(f) (collectively, the "Owned
      Intellectual Property"), and all goodwill associated with such Owned
      Intellectual Property.

            (g) Goodwill. All customer relationships of Seller and related
      goodwill as a going concern and other intangible personal property
      relating to the Business, to the extent transferable;

            (h) Deposits, Rebates and Warranties. Deposits, rebates, warranties
      and rights with respect thereto, including all of Seller's prepaid
      expenses, credit memoranda, warranties and deposits relating to the
      Business, including those listed on Schedule 2.1(h), except as described
      in Section 2.3(a);

            (i) Orders. All records of sale orders, quotations and bids;

            (j) Vehicles. All vehicles used in the Business, including those
      vehicles described on Schedule 2.1(j); and

            (k) Other Assets. All other assets pertaining to the Business.

All of the foregoing assets described in this Section 2.1, together with the
Transferable Permits and the Purchased Contracts, but excluding the Excluded
Assets, are referred to herein collectively as the "Purchased Assets."

      2.2 Assignment of Contracts. Except as provided in Section 2.3 and subject
to the other terms and conditions of this Agreement and the terms of the
Assignment and Assumption Agreement, at the Closing, Seller shall assign and
transfer to Purchaser, and Purchaser shall take assignment of, all of Seller's
title, right and interest in and to the Permits held by Seller, to the extent
such Permits are transferable (collectively, the "Transferable Permits"), and
the Contracts to which Seller is a party, which are listed below:

            (a) Personal Property Leases. The leases to or by Seller of personal
      property listed on Schedule 2.2(a) (collectively, the "Personal Property
      Leases");

                                        9
<PAGE>

            (b) Customer Contracts. The sale orders and other Contracts for the
      provision by Seller of goods or services to customers listed on Schedule
      2.2(b) (collectively, the "Customer Contracts");

            (c) Supply Contracts. The purchase orders and other Contracts for
      the purchase by Seller of goods or services listed on Schedule 2.2(c)
      (collectively, the "Supply Contracts");

            (d) Intellectual Property Licenses. The agreements for the license
      to or by Seller of any Intellectual Property or software listed on
      Schedule 2.2(d) (collectively, the "Intellectual Property Licenses"); and

            (e) Other Contracts. The other Contracts to which Seller is a party
      listed on Schedule 2.2(e).

All of the foregoing Contracts, excluding Excluded Assets, are referred to
herein collectively as the "Purchased Contracts." Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign or transfer any Contract or any claim or right or any benefit or
obligation thereunder or resulting therefrom if an assignment or transfer
thereof, without the consent of a third party thereto, would constitute a breach
or violation thereof or impose any obligation or liability on Seller and if such
a consent is not obtained at or prior to the Closing, in which case Section 6.2
shall apply.

      2.3 Excluded Assets. Notwithstanding the provisions of Sections 2.1 and
2.2, Seller shall not sell, assign, convey, transfer or deliver to Purchaser,
and Purchaser shall not purchase, acquire or take assignment or delivery of, any
of the following assets or rights, or any right, title or interest of Seller
therein (collectively, the "Excluded Assets"):

            (a) Cash. All cash, certificates of deposit, bank deposits,
      negotiable instruments, marketable securities and other cash equivalents,
      together with all accrued but unpaid interest thereon;

            (b) Etex Name. Any Internet domain names, logos, trade names, trade
      marks, service names or service marks containing the name "Etex" and any
      variations or derivations thereof, and all goodwill associated therewith;

            (c) Tax Refunds. All claims for and rights to receive Tax refunds,
      all Tax Returns, and all notes, worksheets, files or documents relating
      thereto;

            (d) Claims. All claims, causes of action rights of recovery, defense
      or counterclaim and rights of set-off of any kind (including rights under
      and pursuant to all warranties, representations and guarantees made by
      suppliers of products, materials or equipment or components thereof)
      relating to any Excluded Obligations;

            (e) Corporate Records. The minute books from the meetings (or
      consents in lieu thereof) of the board of directors and stockholders of
      Seller and the stock ownership records of Seller;

                                       10
<PAGE>

            (f) Employee Records. All personnel, employee compensation and
      benefits and labor relations records relating to employees of Seller;
      provided, however, that Seller shall deliver to Purchaser all such records
      that relate to Purchaser's Employees, and may retain copies of such
      records as it deems appropriate;

            (g) Excluded Books and Records. All books and records that relate
      primarily to Excluded Assets or Excluded Obligations;

            (h) Sale Documents. All books and records prepared in connection
      with the sale of Seller and/or its business and assets, including offers
      received from prospective purchasers and any information relating to such
      offers;

            (i) Debt Agreements and Guarantees. All rights of Seller under the
      following Contracts, and all Contracts and other documents executed and
      delivered in connection therewith:

                  (i) Revolving Credit Facility dated March 12, 1997 between
      International Building Materials, S.A. and Seller (formerly known as
      F.C.P., Inc.); and

                  (ii) Accession Letter and Accession Deed each dated April 11,
      2001 from Seller and Etex Group S.A. to Deutsche Bank AG London as Agent
      for certain lenders under a Facility Agreement dated 21 January 2001, as
      amended by a Syndication Agreement dated 14 March 2001, and the related
      Letter of Support dated March 5, 2001 from Eterco S.A. to Seller and
      certain other subsidiaries of Etex Group S.A.;

            (j) This Agreement. All rights of Seller under this Agreement and
      the Related Agreements;

            (k) Insurance. All rights of Seller under insurance policies;
      provided that Purchaser shall be entitled to the proceeds received by
      Seller under insurance policies to the extent that such proceeds relate to
      losses that arise with respect to Purchased Assets or Assumed Obligations,
      due to events occurring before the Closing Date;

            (l) Non-Transferable Permits. All Permits that are held by Seller to
      the extent such Permits are not transferable;

            (m) Real Property. All right, title and interest in and to the
      Excluded Real Property;

            (n) Know-How. All Know-How and all right, title and interest in and
      to the Excluded Technology; and

            (o) Other Excluded Assets. All right, title and interest in and to
      the FILOT Lease and all Personal Property Leases, Customer Contracts,
      Supply Contracts, Intellectual Property Licenses and other Contracts other
      than those listed in Section 2.2, and all assets of Seller listed on
      Schedule 2.3(o).

                                       11
<PAGE>

None of the Excluded Assets shall be included in the term "Purchased Assets" or
"Purchased Contracts" or any other term defined in Section 2.1 or 2.2.

      2.4 Assumed Obligations. Except as provided in Section 2.5, at the Closing
Purchaser shall assume, and agree to pay, perform, fulfill and discharge when
due the following (collectively, excluding the Excluded Obligations, the
"Assumed Obligations"):

            (a) Closing Date Balance Sheet. The Liabilities set forth, and to
      the extent provided for, in the Closing Date Balance Sheet;

            (b) Purchased Contracts. The Liabilities of Seller under the
      Purchased Contracts (but not any Liabilities of Seller in respect of a
      breach of or default under such Purchased Contracts arising prior to
      Closing);

            (c) Product Support. The obligations and commitments under
      warranties with respect to products and services of the Business
      manufactured, performed, sold, distributed or rented prior to the Closing
      by Seller, to the extent provided for in the Closing Date Balance Sheet
      (collectively "Product Support");

            (d) Environmental Claims. The Liabilities relating to any
      Environmental Claims up to an aggregate amount of $550,000; and

            (e) Scheduled Liabilities. The other Liabilities set forth on
      Schedule 2.4(e).

      2.5 Excluded Obligations. Notwithstanding anything in this Agreement or
any of the Related Agreements to the contrary, except as specifically set forth
in Section 2.4, neither Purchaser nor any of its Affiliates, agents,
representatives, independent contractors or employees shall assume or otherwise
be liable in respect of, or be deemed to have assumed or otherwise be liable in
respect of, any Liability of Seller or any of its Affiliates whatsoever that
arose, arises, or will manifest itself at any time (collectively, the "Excluded
Obligations"), including:

            (a) Taxes. Except as provided in Section 9.1, all obligations for
      Taxes of, or pertaining or attributable to, (i) Seller or its Affiliates
      for any period that ends on or before, and includes, the Closing Date, or
      (ii) the Purchased Assets for any period or portion of a period that ends
      on or before the Closing Date. Such obligations include all Taxes
      described in clauses (i) and (ii) of this Section 2.5(a) for which
      liability is or may be sought to be imposed on Purchaser under any
      successor liability, transferee liability or similar provision of any
      applicable federal, foreign, state or local law;

            (b) Liability Under Agreement. Any Liability of Seller or Seller's
      Affiliates under this Agreement or any of the Related Agreements, and any
      Liability of Seller or Seller's Affiliates arising out of the breach of
      this Agreement or the Related Agreements;

            (c) Fees. All fees unrelated to the Business owing to Governmental
      Authorities that are attributable to Seller or Seller's business
      activities after the Closing Date and Seller's Affiliates;

                                       12
<PAGE>

            (d) Fees and Expenses Related to Agreement. Any Liabilities for
      legal, accounting, audit and investment banking fees, brokerage
      commissions and any other expenses incurred by Seller in connection with
      the negotiation and preparation of this Agreement, the Related Agreements
      and the acquisition of the assets by Purchaser contemplated hereby;

            (e) Insurance Policies. Any Liabilities under those insurance
      policies which are not assigned to Purchaser pursuant to the provisions of
      this Agreement, together with any Liabilities for retroactive or similar
      insurance premium adjustments under those policies;

            (f) Employees. (i) Liabilities relating to, or involving, any of
      Seller's employees, independent individual contractors, individual agents
      or individual representatives for any matter, claim, dispute, allegation
      or action arising prior to the Closing Date; (ii) Liabilities under
      collective bargaining agreements pertaining to Seller's employees; (iii)
      Liabilities to pay severance benefits (including the severance agreements
      entered into between Seller and the individuals listed on Schedule
      8.2(c)), salaries, wages, bonuses, vacation pay and other compensation
      which are owed by Seller to Seller's employees as of the Closing Date or
      any such Liabilities owing to Seller's employees for their services prior
      to the Closing Date and (iv) Liabilities arising out of or in connection
      with Seller's employee welfare, pension and profit sharing plans; and

            (g) Any Liabilities under or related to the Contracts referenced in
      Section 2.3(i).

                                   ARTICLE III

                           PURCHASE PRICE AND PAYMENT

      3.1 Payment of Purchase Price.

            (a) The total consideration for the Purchased Assets shall consist
      of (i) the assumption by Purchaser of the Assumed Obligations, and (ii)
      the payment of the Purchase Price in accordance with this Section 3.1.

            (b) At the Closing, Purchaser shall pay to Seller $39 million.

            (c) Within three (3) Business Days after the date that the Closing
      Date Balance Sheet and June 30 Balance Sheet become final and binding in
      accordance with Section 3.2, (i) if there is a Net Book Value Deficiency,
      Seller shall pay to Purchaser the amount of the Net Book Value Deficiency,
      and (ii) if there is a Net Book Value Excess, Purchaser shall pay to
      Seller the amount of the Net Book Value Excess, which amount in either
      case shall be payable together with interest thereon from the Closing Date
      until the date paid calculated using simple interest and the 10-year bond
      rate as of the date hereof from Bloomberg U.S. Treasury Reports.

                                       13
<PAGE>

            (d) All payments made hereunder shall be made in accordance with
      Section 9.4 and to such account or accounts as the receiving party shall
      designate in writing to the paying party.

      3.2 Closing Date Balance Sheet.

            (a) Within sixty (60) days after the Closing Date, Purchaser shall
      (i) prepare (x) a balance sheet for the Purchased Assets and Assumed
      Obligations as of the Closing Date (the "Closing Date Balance Sheet"), and
      (y) a balance sheet for the Purchased Assets and Assumed Obligations as of
      June 30, 2001, which shall be derived from the Purchased Assets and
      Assumed Obligations set forth in the unaudited balance sheet of Seller,
      dated as of June 30, 2001, a copy of which is included in the Financial
      Statements (the "June 30 Balance Sheet"), (ii) cause KPMG LLP to audit the
      Closing Date Balance Sheet and the June 30 Balance Sheet and (iii) deliver
      a copy of each of the Closing Date Balance Sheet and the June 30 Balance
      Sheet to Seller. Each of the Closing Date Balance Sheet and the June 30
      Balance Sheet shall be prepared in accordance with U.S. GAAP on a basis
      consistent with accounting principles, practices and procedures used by
      Seller in the preparation of the balance sheets included in the Financial
      Statements as more fully set forth in Schedule 3.2, as modified by the
      exceptions to the accounting principles, practices and procedures set
      forth on Schedule 3.2. The audited Closing Date Balance Sheet and the
      audited June 30 Balance Sheet delivered pursuant to this Section 3.2(a)
      shall be accompanied by a statement setting forth Purchaser's
      determination of any Net Book Value Excess or any Net Book Value
      Deficiency. Promptly upon Seller's request, Purchaser shall make available
      to Seller copies of the work papers and back-up materials used by
      Purchaser in preparing the Closing Date Balance Sheet and such other
      documents as Seller may reasonably request in connection with its review
      of the Closing Date Balance Sheet and June 30 Balance Sheet. Purchaser and
      Seller shall each pay one-half of the fees and expenses of KPMG LLP to
      audit the Closing Date Balance Sheet and the June 30 Balance Sheet.

            (b) Within thirty (30) days after receipt of the audited Closing
      Date Balance Sheet and audited June 30 Balance Sheet, Seller shall deliver
      to Purchaser a written statement describing its objections (if any) to the
      Closing Date Balance Sheet and June 30 Balance Sheet and Purchaser's
      determination of the Net Book Value Excess or Net Book Value Deficiency.
      If Seller does not so raise any objections in a written statement to
      Purchaser within such thirty-day period, the Closing Date Balance Sheet
      and June 30 Balance Sheet shall become final and binding upon all parties.
      If Seller does so raise objections in a written statement to Purchaser
      within such thirty-day period, and the parties cannot resolve such
      objections within ten (10) Business Days after the receipt by Purchaser of
      such written statement, any remaining disputes shall be resolved by Arthur
      Andersen LLP or another nationally recognized independent accounting firm
      mutually agreeable to Purchaser and Seller (the "Accounting Firm"). The
      Accounting Firm shall be instructed to resolve such disputes within thirty
      (30) days after its appointment. The resolution of disputes by the
      Accounting Firm shall be set forth in writing and shall be conclusive and
      binding upon all parties and the Closing Date Balance Sheet and June 30
      Balance Sheet, as modified by such resolution, shall become final and
      binding upon the date of such resolution and shall be used to determine
      the final amount of any Net Book

                                       14
<PAGE>

      Value Excess or Net Book Value Deficiency. The fees and expenses of the
      Accounting Firm shall be apportioned between the parties by the Accounting
      Firm based on the degree to which each party's claims were unsuccessful
      and shall be paid by the parties in accordance with such determination.
      For example, if pursuant to this Section 3.2(b) Seller submitted an
      objection affecting the Purchase Price in the amount of $100,000 and
      prevailed as to $45,000 of such amount, then Seller would bear fifty-five
      percent (55%) of the fees and expenses of the Accounting Firm.

      3.3 Allocation of Consideration.

            (a) Within 60 days after the Closing Date, Purchaser will provide to
      Seller copies of Internal Revenue Service Form 8594 and all other related
      documents the Code and applicable United States Treasury regulations
      require (the "Asset Acquisition Statement") with Purchaser's proposed
      allocation of the Purchase Price (together with any Assumed Obligations),
      such allocation to be made in accordance with the Code and applicable
      United States Treasury regulations. Within 15 days after the receipt of
      such Asset Acquisition Statement, Seller will propose to Purchaser any
      changes to such Asset Acquisition Statement. If Seller proposes no such
      changes in writing to Purchaser within that 15-day period, Seller will
      have agreed to, and accepted, the Asset Acquisition Statement. Purchaser
      and Seller will try to resolve any differences with respect to the Asset
      Acquisition Statement within 15 days after Purchaser's receipt of written
      notice of objection from Seller.

            (b) If Seller withholds its consent to the allocation shown in the
      Asset Acquisition Statement, and Purchaser and Seller have acted in good
      faith to resolve any differences with respect to items on the Asset
      Acquisition Statement and are unable to resolve any differences, then the
      Accounting Firm will conclusively resolve any remaining disputed matters.
      The Accounting Firm shall be instructed to resolve such disputes within
      thirty (30) days after its receipt of the information necessary to make
      such a determination. No later than 30 days after its receipt of the
      information necessary to make such a determination, the Accounting Firm
      shall determine (based solely on presentations by Seller and Purchaser and
      not by independent review) only those matters in dispute and will issue a
      written report about the disputed matters and the resulting allocation of
      Purchase Price (together with any Assumed Obligations). The report shall
      be conclusive and binding upon the Purchaser and Seller. Subject to the
      requirements of any applicable tax law or election, Purchaser and Seller
      shall file all Tax Returns and reports consistently with the allocation
      provided in the Asset Acquisition Statement or, if applicable, the
      determination of the Accounting Firm. Seller and Purchaser shall share
      equally the fees charged by and expenses of the Accounting Firm. Any
      adjustment to the Purchase Price (together with Assumed Obligations) shall
      be allocated in accordance with the Code and applicable United States
      Treasury regulations.

                                   ARTICLE TV

                    REPRESENTATIONS AND WARRANTIES OF SELLER

      Seller represents and warrants to Purchaser as follows:

                                       15
<PAGE>

      4.1 Due Incorporation; Subsidiaries.

            (a) Seller is a corporation duly incorporated under the laws of the
      Commonwealth of Pennsylvania. Seller is validly existing and in good
      standing under the laws of the Commonwealth of Pennsylvania, with all
      requisite corporate power and authority to own the Purchased Assets, lease
      the Leased Assets and operate the Assets and to conduct its business as
      they are now being owned, leased, operated and conducted.

            (b) Seller is licensed or qualified to do business and is in good
      standing as a foreign corporation in each jurisdiction where the nature of
      the Assets or Seller's conduct of its business requires such licensing or
      qualification and in which the failure to be so licensed or qualified
      would be material. Such jurisdictions are listed in Schedule 4.1.

            (c) Except as set forth in Schedule 4.1, Seller does not directly or
      indirectly own any shares of capital stock or any other equity interest in
      any Person.

      4.2 Due Authorization. Seller has all requisite corporate power and
authority to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Seller of this Agreement and its Related Agreements,
and the consummation by Seller of the transactions contemplated hereby and
thereby, have been duly and validly approved by Seller and no other corporate
actions or proceedings on the part of Seller are necessary to authorize this
Agreement, its Related Agreements and the transactions contemplated hereby and
thereby. Seller has duly and validly executed and delivered this Agreement and
has duly and validly executed and delivered (or prior to or at the Closing will
duly and validly execute and deliver) its Related Agreements. Assuming due
authorization, execution and delivery of this Agreement and its Related
Agreements by the other parties hereto and thereto, this Agreement constitutes a
legal, valid and binding obligation of Seller, and each of its Related
Agreements constitute (or upon execution and delivery by Seller will constitute)
legal, valid and binding obligations of Seller, in each case, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect that affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies
and by principles of equity (collectively, "Enforceability Limitations").

      4.3 Consents and Approvals; Authority Relative to this Agreement.

            (a) Except as set forth in Schedule 4.3, no consent, authorization
      or approval of, or filing or registration with, any Governmental Authority
      or any other Person not a party to this Agreement has not been obtained
      which is necessary in connection with the execution, delivery or
      performance by Seller of this Agreement or any of its Related Agreements
      or the consummation by Seller of the transactions contemplated hereby or
      thereby.

            (b) Except as set forth in Schedule 4.3, the execution, delivery and
      performance by Seller of this Agreement and its Related Agreements, and
      the consummation by Seller of the transactions contemplated hereby and
      thereby, do not and

                                       16
<PAGE>

      will not (i) violate any material Law applicable to or binding on Seller
      or the Assets; (ii) violate or conflict with, result in a breach or
      termination of, constitute a default or give any third party any
      additional right (including a termination right) under, permit
      cancellation of, result in the creation of any Lien upon any of the
      Purchased Assets under, or result in or constitute a circumstance which,
      with or without notice or lapse of time or both, would constitute any of
      the foregoing under, any Contract to which Seller is a party or by which
      Seller or any of the Purchased Assets are bound, except where such
      violation, conflict, breach, termination, default, right, cancellation or
      Lien would be immaterial and would not materially affect the ability of
      Seller to consummate the transactions contemplated by this Agreement,
      (iii) permit the acceleration of the maturity of any indebtedness of
      Seller or indebtedness secured by any of the Purchased Assets; or (iv)
      violate or conflict with any provision of the certificate of incorporation
      or by-laws of Seller.

      4.4 Financial Statements; Undisclosed Liabilities.

            (a) Except as set forth in Schedule 4.4, the Financial Statements
      have been prepared in accordance with U.S. GAAP and the accounting
      principles, practices and procedures set forth on Schedule 3.2
      consistently applied (except that the financial statements as of and for
      the period ended June 30, 2001 have not been prepared in accordance with
      U.S. GAAP) and present fairly the financial position of Seller as of the
      date thereof and the results of operations and cash flows of Seller for
      the period covered thereby. The Financial Statements are in accordance
      with the books and records of Seller.

            (b) Except as set forth in Schedule 4.4 or in the Financial
      Statements, Seller has no liabilities, debts or obligations which were
      required to be reported in a balance sheet as of June 30, 2001 prepared in
      accordance with U.S. GAAP.

            (c) Except as set forth in Schedule 4.4 and other than liabilities,
      debts and obligations which were incurred in the Ordinary Course of
      Business or which are not material, since June 30, 2001, Seller has
      incurred no liabilities, debts or obligations which would be required to
      be reported in accordance with U.S. GAAP in a balance sheet dated and
      effective as of the date hereof.

      4.5 No Adverse Effects or Changes. Except as listed in Schedule 4.5 and
for the Excluded Obligations, since June 30, 2001, Seller has not:

            (a) suffered any event (or series of related events) having an
      effect on the business, operations, results of operations or financial
      condition of Seller as a whole which involves an aggregate amount in
      excess of $550,000 and is adverse to Seller, excluding matters that are
      general industry wide developments;

            (b) suffered any damage, destruction or loss in excess of $75,000 in
      the aggregate to any of its material assets that was not covered by
      insurance;

            (c) sold, transferred, conveyed or otherwise disposed of, or
      encumbered with any Lien (other than Permitted Liens), any asset having an
      individual book value in

                                       17
<PAGE>

excess of $20,000, except in the Ordinary Course of Business and consistent with
past practice;

            (d) made any material changes in its accounting principles or
      practices;

            (e) entered into any material transaction with any of its
      Affiliates;

            (f) made any borrowings or incurred any material debt (other than
      borrowings made and debt incurred in the Ordinary Course of Business and
      consistent with past practice), or assumed, guaranteed, endorsed (except
      for the negotiation or collection of negotiable instruments in
      transactions in the Ordinary Course of Business and consistent with past
      practice) or otherwise become liable (whether directly, contingently or
      otherwise) for any material obligations of any other Person;

            (g) made any loans or capital contributions to, or investments in,
      any other Person;

            (h) acquired or leased any assets having an individual book value in
      excess of $20,000 except in the Ordinary Course of Business and consistent
      with past practice;

            (i) paid any amount, performed any obligation or agreed to pay any
      amount or perform any obligation, in settlement or compromise of any suits
      or claims of liability against Seller or any of its directors, officers or
      employees, except in the Ordinary Course of Business and consistent with
      past practice; or

            (j) entered into any other material Contract other than in the
      Ordinary Course of Business and consistent with past practice.

      4.6 Title to Properties. Except as disclosed in Schedule 4.6, Seller has
good title to, and is the lawful owner of, all of the Purchased Assets, free and
clear of any Lien other than Permitted Liens. Except as set forth in Schedule
4.6 and subject to obtaining all consents, authorizations and approvals set
forth in Schedule 4.3, Seller has the full right to sell, convey, transfer,
assign and deliver the Purchased Assets to Purchaser. Except as set forth in
Schedule 4.6 and subject to obtaining all consents, authorizations and approvals
set forth in Schedule 4.3, at the Closing Seller shall convey to Purchaser good
title to all of the Purchased Assets, free and clear of any Lien except for
Permitted Liens.

      4.7 Condition of Assets. Except as disclosed in Schedule 4.7, to Seller's
knowledge, all of the tangible Assets, whether real or personal, owned or
leased, are in reasonable operating condition and repair (with the exception of
normal wear and tear) for the purposes of Seller's business as currently
operated.

      4.8 Real Property.

            (a) Schedule 4.8 includes a true, accurate and complete list of each
      parcel of land that is owned or leased by Seller and the street address of
      such parcel. Except as disclosed in Schedule 4.8, Seller does not hold any
      real estate under any real property lease. Except as disclosed in Schedule
      4.8, the activities carried on by Seller in all

                                       18
<PAGE>

      buildings, plants and other structures located on or at the Real Property,
      and the buildings, plants and other structures themselves in which Seller
      carries on such activities, are not in material violation of, or in
      material conflict with, any applicable zoning regulation or ordinance or
      any other similar Law applicable to or binding on Seller or any of the
      Real Property. Seller has made available to Purchaser true and complete
      copies of all reports (if any) of any environmental consultants in its
      possession relating to any of the Real Property.

            (b) Except as set forth on Schedule 4.8, none of the Real Property
      is subject to any Lien, easement, right-of-way, or building or use
      restriction, other than Permitted Liens.

            (c) Except as disclosed in Schedule 4.8, there is no pending, or, to
      Seller's knowledge, threatened, proceeding or action by any Governmental
      Authority to condemn or take by the power of eminent domain (or to
      purchase in lieu thereof) all or any part of the Real Property.

            (d) Except as set forth on Schedule 4.8, Seller is not a party to,
      and none of the Real Property is subject to, any leases, license
      agreements, occupancy agreements or amendments thereto which will be
      binding on the Real Property or Purchaser on or after the date of Closing,
      and Seller is not a party to, and none of the Real Property is subject to,
      any other contractual agreements or instruments which would be binding
      upon the Real Property or Purchaser on or after the date of Closing,
      except the Purchased Contracts.

            (e) To Seller's knowledge, there are no lease brokerage agreements,
      leasing commission agreements or other agreements providing for payments
      of any amounts for leasing activities or procuring tenants with respect to
      the Real Property.

            (f) True and complete copies of the most recent real estate tax
      bills for the Real Property received by Seller have been delivered to
      Purchaser. Except as disclosed, Seller has not filed, and has not retained
      anyone to file, notices of protests against, or to commence action to
      review, real property tax assessments against the Real Property. There
      are no pending real estate tax assessment protests or proceedings with
      respect to the Real Property.

            (g) To Seller's knowledge, Seller has not received any written
      notice from any insurance company or board of fire underwriters of any
      defects or inadequacies in or on the Real Property or any part or
      component thereof that would materially and adversely affect the
      insurability of the Real Property or cause any material increase in the
      premiums for insurance for the Real Property that have not been cured or
      repaired.

      4.9 Equipment. Schedule 4.9 includes an accurate and complete list as of
June 30, 2001 of all material equipment owned by Seller. Schedule 4.9 also sets
forth an accurate and complete list of each Personal Property Lease having
aggregate minimum lease payments in excess of $10,000. Seller has made available
to Purchaser true and complete copies of all such Personal Property Leases.

                                       19
<PAGE>

      4.10 Inventories. Schedule 4.10 contains a list of all inventories of
Seller as of June 30, 2001, which list is accurate and complete in all material
respects.

      4.11 Accounts Receivable; Advances. Schedule 4.11 contains an accurate and
complete aging schedule as of June 30, 2001 of all accounts receivable due to
Seller resulting from goods sold or services provided by Seller and a list of
all loans and advances by Seller to third parties. Except as disclosed in
Schedule 4.11, each Account Receivable in excess of $10,000 represents a sale
made or service provided in the Ordinary Course of Business.

      4.12 Intellectual Property. Schedule 4.12 is an accurate and complete list
of all material Owned Intellectual Property that is registered with a
governmental agency, all material unregistered trademarks included in the Owned
Intellectual Property and all material Intellectual Property Licenses. Except as
disclosed in Schedule 4.12:

            (a) all of the Owned Intellectual Property is owned by Seller free
      and clear of all Liens, and is not subject to any license, royalty or
      other agreement to which Seller is party, and Seller has not granted any
      license or agreed to pay or receive any royalty in respect of any Owned
      Intellectual Property; and

            (b) none of the Owned Intellectual Property or any Intellectual
      Property licensed to Seller under an Intellectual Property License
      ("Licensed Intellectual Property") is (i) the subject of any, to Seller's
      knowledge (with respect to Licensed Intellectual Property only), pending,
      or, to Seller's knowledge (with respect to Owned Intellectual Property and
      Licensed Intellectual Property), threatened, litigation or claim of
      infringement against Seller or (ii) to Seller's knowledge (with respect to
      Licensed Intellectual Property only), claimed to be invalid or, to
      Seller's knowledge (with respect to Owned Intellectual Property and
      Licensed Intellectual Property), invalid.

      4.13 Contracts. Schedule 4.13 is an accurate and complete list of all the
executory Contracts of the following types to which Seller is a party or by
which it is bound, or to which any of the Purchased Assets is subject:

            (a) any Contract which requires a payment by any party in excess of,
      or a series of payments which in the aggregate exceed, $20,000 or provides
      for the delivery of goods or performance of services, or any combination
      thereof, having a value in excess of $20,000, and which, in any case, has
      not been entered into in the Ordinary Course of Business;

            (b) any collective bargaining agreement;

            (c) any Contract with a sales representative, manufacturer's
      representative, distributor, dealer, broker, sales agency, advertising
      agency or other Person engaged in sales, distributing or promotional
      activities, or any Contract to act as one of the foregoing on behalf of
      any Person;

            (d) any Contract pursuant to which Seller has made or will make
      loans or advances, or has or will have incurred indebtedness for borrowed
      money or become a guarantor or surety or pledged its credit for or
      otherwise become responsible with respect

                                       20
<PAGE>

      to any undertaking of another Person (except for the negotiation or
      collection of negotiable instruments in transactions in the Ordinary
      Course of Business);

            (e) any Contract involving a partnership, joint venture or other
      cooperative undertaking;

            (f) any Contract involving any restrictions with respect to the
      geographical area of operations or scope or type of business of Seller; or

            (g) any power of attorney or Contract with any Person pursuant to
      which such Person is granted the authority to act for or on behalf of
      Seller or Seller is granted the authority to act for or on behalf of any
      Person.

Seller has made available to Purchaser accurate and complete copies of each
Contract listed in Schedules 4.12 and 4.13. Except as disclosed in Schedule
4.13, each such Contract is in full force and effect and constitutes a legal,
valid and binding obligation of Seller and, to Seller's knowledge, the other
parties thereto, enforceable against the Seller and, to Seller's knowledge, the
other parties thereto in accordance with its terms, subject to Enforceability
Limitations.

      4.14 Permits. Schedule 4.14 is an accurate and complete list of all
material Permits (other than Environmental Permits) held by Seller. Except as
set forth in Schedule 4.14, all the Permits so listed are in full force and
effect and Seller has not received any notice that any such Permit will be
revoked or canceled. Except for the Permits listed on Schedule 4.14 and except
for such Permits the failure to have which would be immaterial, there are no
Permits (other than Environmental Permits) which are necessary for Seller to
operate its business as currently conducted.

      4.15 Insurance.

            (a) Schedule 4.15 contains an accurate and complete list of all
      material policies of fire, liability, workers' compensation, title and
      other forms of insurance owned or held by Seller, and Seller has made
      available to Purchaser accurate and complete copies of all such policies,
      other than policies relating to Seller's employee benefit plans.

            (b) Schedule 4.15 contains an accurate and complete list of all
      claims in excess of $10,000 which have been made by Seller since January
      1, 1999 under any workers' compensation, general liability, property or
      other insurance policy.

      4.16 Employment and Labor Matters.

            (a) Seller has made available to Purchaser an accurate and complete
      list of the names, titles or job descriptions and annual compensation for
      the preceding fiscal year, of all the employees and officers of Seller.
      Except as described in Schedule 4.16, (i) Seller is not a party to any
      collective bargaining agreement; (ii) since January 1, 1999, to Seller's
      knowledge, none of Seller's employees have been subject to any organizing
      campaign by any union or local chapter of any union; (iii) since January
      1, 1999, Seller has not been subject to any claim, lawsuit or cause of
      action with respect to, or to Seller's

                                       21
<PAGE>

      knowledge any threatened claim of, an unfair labor practice or a
      discrimination, wrongful discharge, constructive discharge or wage and
      hour matter relating to employees of Seller; and (iv) there is, and since
      January 1, 1999 there has been, no labor strike, material labor dispute,
      material labor slow-down, material work stoppage or other material labor
      difficulty pending or, to Seller's knowledge, threatened, against Seller.

            (b) Seller is in compliance with all applicable laws, rules and
      regulations concerning employment, employment practices, leave, safety,
      discrimination, harassment, immigration, labor relations, wages, hours and
      the payment of withholding Taxes, except in each case, where such
      non-compliance has been remedied or would be immaterial. Seller has
      withheld and paid to the appropriate Governmental Authority, or is holding
      for the payment not yet due to any such authority, all amounts required by
      law or agreement to be withheld from the salaries or wages of the
      employees of Seller. Schedule 4.16 sets forth as of the Closing Date a
      list of independent contractors and consultants retained by Seller at any
      time during the twelve (12) months prior to the Closing Date for each of
      Seller's plants in Blandon, Pennsylvania and Summerville, South Carolina.

      4.17 Capital Improvements. Schedule 4.17 describes each capital
improvement and capital expenditure in excess of $20,000 individually which
Seller has committed to or contracted for and which has not been completed prior
to the date hereof and the cost and expense reasonably estimated to complete
such work.

      4.18 Taxes. Seller has filed on a timely basis all material Tax Returns,
as required by applicable Law, and paid all Taxes shown as due and payable on
such Tax Returns, except for any failure to file or pay that could not result in
a liability of Purchaser for Taxes of Seller or result in a Lien on the
Purchased Assets.

      4.19 No Defaults or Violations. Except as disclosed in Schedule 4.19:

            (a) Seller has not breached the provisions of, and is not in default
      under the terms of, any Purchased Contract, and, to Seller's knowledge, no
      other party to any Purchased Contract has breached the provisions of, or
      is in default under the terms of, any Purchased Contract, except in each
      case, where such breach or default has been remedied or would be
      immaterial;

            (b) excluding (i) Laws relating to Taxes (as matters relating to Tax
      Laws are set forth in Section 4.18) and (ii) Environmental Laws (as
      matters relating to Environmental Laws are set forth in Section 4.20),
      Seller is in compliance with all Laws applicable to or binding on it or
      any of the Assets and Real Property, except where the failure to so comply
      would be immaterial; and

            (c) excluding (i) Laws relating to Taxes (as matters relating to Tax
      Laws are set forth in Section 4.18) and (ii) Environmental Laws (as
      matters relating to Environmental Laws are set forth in Section 4.20),
      since January 1, 1999 no notice from any Governmental Authority has been
      received by Seller claiming any violation by Seller

                                       22
<PAGE>

      of any Law applicable to or binding on it or any of the Assets or Real
      Property, except where such violation would be immaterial.

      4.20 Environmental Matters. Except as disclosed in Schedule 4.20:

            (a) Seller, the Business and the Real Property are in compliance
      with all Environmental Laws, except where the failure to so comply would
      be immaterial;

            (b) Schedule 4.20(b) is an accurate and complete list of all
      material Environmental Permits held by Seller;

            (c) Seller is in possession of all Environmental Permits, if any,
      required for the conduct or operation of its business, and is in
      compliance with all of the requirements and limitations included in such
      Environmental Permits except where the failure to possess such
      Environmental Permits or to so comply would be immaterial;

            (d) during the period of Seller's ownership of the Real Property,
      there have been no Hazardous Substances in, on, or at any of the Real
      Property, and there have been no releases of Hazardous Substances in, on
      or at any of the Real Property, except for Hazardous Substances which were
      used or are used in the Ordinary Course of Business and which have been
      stored and used in accordance with all applicable Environmental Laws and
      Environmental Permits, including all so-called "Right To Know Laws", and
      except for such Hazardous Substances, usage or storage that would be
      immaterial;

            (e) there are no landfills, surface impoundments, disposal areas, or
      underground storage tanks on the Real Property, except for such landfills,
      surface impoundments, disposal areas, or underground storage tanks that
      would be immaterial.

            (f) since January 1, 1996 no notice from any Governmental Authority
      has been received by Seller claiming that Seller is in violation of any
      Environmental Law or Environmental Permit, or that Seller is responsible
      (or potentially responsible) for the cleanup or remediation of any
      substances at any location, except, in each case, for violations, cleanups
      or remediations that would be immaterial;

            (g) Seller is not the subject of any pending, or, to Seller's
      knowledge, threatened, litigation or proceedings in any forum, judicial or
      administrative, involving a demand for damages, injunctive relief,
      penalties or other potential liability with respect to violations of any
      Environmental Law, except for such violations that would be immaterial;
      and

            (h) Seller has timely filed all reports and notifications required
      to be filed by it, and has generated and maintained all required records
      and data, under all applicable Environmental Laws, except where the
      failure to so file, generate or maintain would be immaterial.

                                       23
<PAGE>

      4.21  Litigation.

            (a) Except as disclosed in Schedule 4.21, there are no material
      actions, suits, arbitrations, proceedings or other litigation pending, or,
      to Seller's knowledge, threatened, against Seller or any of its officers,
      directors, employees or stockholders in their capacity as such before any
      court or any other Governmental Authority. Except as disclosed in Schedule
      4.21, Seller is not subject to any material order, judgment, decree,
      injunction, stipulation or consent order of or with any court or other
      Governmental Authority, other than orders having application to the
      business in which Seller is engaged as a whole or other industry-wide
      matters.

            (b) There are no actions, suits, proceedings or other litigation
      pending, or, to Seller's knowledge, threatened, by or against Seller or
      any of its Affiliates with respect to this Agreement or the Related
      Agreements, or in connection with the transactions contemplated hereby or
      thereby.

      4.22  Customers and Suppliers.

            (a)   Schedule 4.22 sets forth:

                  (i) an accurate and complete list of the twenty (20) largest
      customers of Seller in terms of revenue during each of the 1999 and 2000
      fiscal years and the period of January 1 through September 30, 2001
      (collectively, the "Major Customers"), showing the total revenue received
      by Seller in each such period from each such customer; and

                  (ii) an accurate and complete list of the ten (10) largest
      suppliers to Seller in terms of purchases during each of the 1999 and 2000
      fiscal years and the period of January 1 through September 30, 2001
      (collectively, the "Major Suppliers"), showing the total purchases made by
      Seller in each such period from each such supplier.

            (b) Except as set forth in Schedule 4.22, since June 30, 2000 there
      has been no material dispute between Seller and any Major Customer or any
      Major Supplier.

      4.23 Sufficiency of Assets. The Purchased Assets, the Real Property, any
personal property leased to Seller under the Personal Property Leases, any
intellectual property licensed to Seller under the Intellectual Property
Licenses and any Know-How to be licensed to Purchaser pursuant to the Know-How
License and Technical Support Agreement together constitute all of the assets,
properties and rights (except for the Excluded Assets) that are currently used
by Seller in the Ordinary Course of Business.

                                    ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

      Purchaser represents and warrants to Seller as follows:

      5.1 Due Incorporation. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Nevada, with all requisite
corporate power and authority

                                       24
<PAGE>

to own, lease and operate its assets and to conduct its business as they are now
being owned, leased, operated and conducted.

      5.2 Due Authorization. Purchaser has all requisite corporate power and
authority to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly approved by its board of
directors and no other corporate actions or proceedings on the part of Purchaser
are necessary to authorize this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby. Purchaser has duly and validly
executed and delivered this Agreement and has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) its Related Agreements. Assuming due authorization, execution and
delivery of this Agreement and its Related Agreements by the other parties
hereto and thereto, this Agreement constitutes a legal, valid and binding
obligation of Purchaser and its Related Agreements constitute (or upon execution
and delivery by Purchaser will constitute) legal, valid and binding obligations
of Purchaser, in each case, enforceable in accordance with their respective
terms, except as such enforceability may be limited by Enforceability
Limitations.

      5.3 Consents and Approvals; Authority Relative to this Agreement.

            (a) Except as set forth in Schedule 5.3, no consent, authorization
      or approval of, or filing or registration with, any Governmental Authority
      or any other Person not a party to this Agreement is necessary in
      connection with the execution, delivery or performance by Purchaser of
      this Agreement or any of its Related Agreements or the consummation by
      Purchaser of the transactions contemplated hereby or thereby.

            (b) Except as set forth in Schedule 5.3, the execution, delivery and
      performance by Purchaser of this Agreement and its Related Agreements, and
      the consummation by Purchaser of the transactions contemplated hereby and
      thereby, do not and will not (i) violate any material Law applicable to or
      binding on Purchaser or any of its assets; (ii) violate or conflict with,
      result in a breach or termination of, constitute a default or give any
      third party any additional right (including a termination right) under,
      permit cancellation of, result in the creation of any Lien upon any of the
      assets of Purchaser under, or result in or constitute a circumstance
      which, with or without notice or lapse of time or both, would constitute
      any of the foregoing under, any Contract to which Purchaser is a party or
      by which Purchaser or any of its assets are bound; (iii) permit the
      acceleration of the maturity of any indebtedness of Purchaser or
      indebtedness secured by its assets; or (iv) violate or conflict with any
      provision of Purchaser's certificate of incorporation or by-laws.

      5.4 Litigation. There are no actions, suits, proceedings or other
litigation pending, or, to Purchaser's knowledge, threatened, by or against
Purchaser or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby.

                                       25
<PAGE>

      5.5 Independent Investigation. In making the decision to enter into this
Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants and obligations of Seller set forth in this Agreement and
in Seller's Related Agreements, Purchaser has relied solely on its own
independent investigation, analysis and evaluation of Seller, its business and
the Assets (including Purchaser's own estimate and appraisal of the value of the
business, financial condition, operations and prospects of Seller and the
Assets). Purchaser confirms to Seller that Purchaser is sophisticated and
knowledgeable in the business of Seller and is capable of evaluating the matters
set forth above.

      5.6 Fair Market Value. Purchaser has determined that the fair market value
of the Purchased Assets, in the aggregate, is no greater than the Purchase Price
and the Assumed Obligations and is, in any event, less than $50,000,000.

      5.7 Transaction Structure. All statements contained in the letter attached
hereto as Schedule 5.7 are true and correct in all material respects and do not
omit to state a material fact necessary to make the statements contained therein
not misleading.

                                   ARTICLE VI

                                   COVENANTS

      6.1 Implementing Agreement. Subject to the terms and conditions hereof,
each Party shall take all action required of it to fulfill its obligations under
the terms of this Agreement, including taking all commercially reasonable action
necessary to obtain any required regulatory approval, and shall otherwise use
all commercially reasonable efforts to facilitate the consummation of the
transactions contemplated hereby. After Closing, (i) Seller shall promptly pay
to Purchaser any amounts it receives which are Purchased Assets or which arise
after Closing from Purchased Assets and (ii) Purchaser shall promptly pay to
Seller any amounts its receives which are Excluded Assets or which arise after
Closing from Excluded Assets.

      6.2 Consents and Approvals. If a consent or approval is required by any
third party to any of the Purchased Contracts and is not obtained at or before
the Closing or if an attempted transfer, conveyance or assignment is
ineffective, Seller shall cooperate with Purchaser in any commercially
reasonable arrangement requested by Purchaser that provides to Purchaser the
benefits under any such Purchased Contract and imposes on Purchaser the
obligations and liabilities under such Purchased Contract.

      6.3 Trademarks.

            (a) Seller is not granting Purchaser a license to use, Seller is not
      transferring to Purchaser, and Purchaser shall not have any right, title
      or interest in or to, the "Etex" logo or the name "Etex" or any variation
      or derivation thereof, or any Internet domain name, logo, name, mark,
      variation or derivation incorporating any such logo, name, variation or
      derivation. Purchaser agrees, from and after 30 days after the Closing, to
      cease to use, directly or indirectly, and in any manner or form (including
      as a corporate or fictitious name, Internet domain name, trade name,
      trademark, service name or service

                                       26
<PAGE>

      mark), and to remove from the Assets, the "Etex" logo, the name "Etex" and
      any variations and derivations thereof, and any Internet domain name,
      logo, name, variation and derivation incorporating any such logo, name,
      variation or derivation, provided, that Purchaser may sell any finished
      goods inventory, and use any product brochures, packaging and price lists,
      which are in existence on the Closing Date and bear any "Etex" name or
      logo, for a period of six (6) months after the Closing Date; provided,
      further, that Purchaser shall not replenish any finished goods inventory,
      product brochures, packaging or price lists or any other Assets bearing
      the "Etex" name or logo during such 30-day or 6-month periods described
      above.

            (b) Purchaser acknowledges that Seller and its Affiliates would be
      irreparably harmed by any breach of this Section 6.3 and that any relief
      under Article VIII will be inadequate to compensate Seller or such
      Affiliates for any such breach. Accordingly, Purchaser (on behalf of
      itself and its Affiliates) agrees that, in addition to any relief
      available under Article VIII, Seller and its Affiliates shall be entitled,
      without the necessity of proving actual damages or posting any bond, to
      injunctive relief against Purchaser (or its Affiliates) in the event of
      any breach or threatened breach by Purchaser (or its Affiliates) of its
      covenants and agreements in this Section 6.3 and Purchaser (on behalf of
      itself and its Affiliates) consents to the entry thereof.

      6.4 Brokers. Regardless of whether the Closing shall occur, (i) Seller
shall indemnify Purchaser and its Affiliates against, and hold Purchaser and its
Affiliates harmless from, any and all liability for any brokers' or finders'
fees or other commissions arising with respect to brokers or finders retained or
engaged by Seller or any of its Affiliates in respect of the transactions
contemplated by this Agreement, and (ii) Purchaser shall indemnify Seller and
its Affiliates against, and hold Seller and its Affiliates harmless from, any
and all liability for any brokers' or finders' fees or other commissions arising
with respect to brokers or finders retained or engaged by Purchaser or any of
its Affiliates in respect of the transactions contemplated by this Agreement.

      6.5 Preservation of Books and Records; Access.

            (a) For a period of seven years after the Closing Date, Purchaser
      shall preserve and retain all Information and Records and other
      accounting, legal, auditing, employee and other books and records
      (including any documents relating to any governmental or non-governmental
      claims, actions, suits, proceedings or investigations) relating to the
      conduct of the business of Seller and the ownership of assets of Seller on
      or prior to the Closing Date. Notwithstanding the foregoing, during such
      seven-year period, Purchaser may dispose of any such books and records
      which are offered to, but not accepted by, Seller. If at any time after
      such seven-year period Purchaser intends to dispose of any such books and
      records, Purchaser shall not do so without first offering such books and
      records to Seller.

            (b) After the Closing Date, Purchaser shall permit Seller and its
      authorized representatives to have reasonable access to, and to inspect
      and copy, all Information and Records and books and records referred to in
      Section 6.5(a) and to meet with officers and employees of Purchaser on a
      mutually convenient basis in order to obtain explanations

                                       27
<PAGE>

      with respect to such Information and Records and books and records and to
      obtain additional information and to call such officers and employees as
      witnesses.

      6.6 Employees; Employee Benefit Plans. Purchaser shall prior to the
Closing Date, using its own unfettered discretion, extend written offers of
employment to be effective one (1) day following the Closing Date to certain of
Seller's employees that Purchaser desires to employ on the day following the
Closing Date. Upon the acceptance of such employees of the offers of employment
made to them by Purchaser, such employees shall be deemed to be Purchaser's
employees ("Purchaser's Employees"). The employment of Purchaser's employees
shall be governed by such terms and conditions of employment as determined in
Purchaser's sole discretion.

      6.7 Purchaser's Access to Information. For a period of seven years after
the Closing Date, Seller shall preserve and retain corporate, records, employee
records and other books and records relating to the Excluded Assets or Excluded
Obligations which were included in the Excluded Assets. After the Closing Date,
Seller shall permit Purchaser and its authorized representatives to have
reasonable access to, and to inspect and copy, such information as is then in
the possession of Seller and as Purchaser shall reasonably request.

      6.8 Trademark "Cemplank". After the Closing Date, Seller shall not seek to
register the trademark "Cemplank" with any Governmental Authority. Seller shall
change its corporate name from "Cemplank" to some name not using the word
"Cemplank" in Pennsylvania and South Carolina on or before the day which is ten
(10) days after the Closing Date.

      6.9 Interim Services.

            (a) For one (1) month following the Closing Date, Seller shall use
      its commercially reasonable efforts to retain Mr. Toussaint Dolmans as an
      employee and make Mr. Dolmans available to perform such services as
      Purchaser shall reasonably request which are consistent with those
      services Mr. Dolmans performed for Seller in the Ordinary Course of
      Business. Mr. Dolmans shall not be required to perform more than forty
      (40) hours of such services per week in such capacity. After such month,
      Mr. Dolmans shall be made available on a more limited basis for consulting
      purposes to the extent he is reasonably available and Purchaser reasonably
      requests.

            (b) For three (3) months following the Closing Date, Purchaser shall
      make employees of the Business reasonably available to Seller at the
      Blandon, Pennsylvania and Summerville, South Carolina facilities to assist
      Seller in the orderly wind-up of its affairs including the preparation of
      financial statements, tax returns, Forms W-2 and similar administrative
      documentation. Purchaser shall during the same period also grant Seller
      reasonable access to its facilities and assistance for the purpose of
      allowing it to assemble any Excluded Assets and arrange for their
      relocation.

            (c) For the services of Mr. Dolmans performed pursuant to this
      Section, Purchaser shall pay to Seller any reasonable out-of-pocket
      expenses actually incurred by Seller or Mr. Dolmans in connection with the
      performance of such services.Such out-of-pocket expenses shall be
      reimbursed promptly following submission to Purchaser.

                                       28
<PAGE>

            (d) Mr. Dolmans shall not be deemed to be an employee of Purchaser,
      and none of Purchaser's employees providing services pursuant to this
      Section 6.9 shall be deemed to be an employee of Seller. Each of Mr.
      Dolmans and Purchaser's employees shall take direction solely from their
      respective employers.

      6.10 Confidentiality. Seller shall keep confidential, and cause its
Affiliates and instruct its and their officers, directors, employees and
advisors to keep confidential, all information relating to the Purchased Assets
and the Business, except (i) as required by law, administrative process or other
public disclosure requirements, (ii) as required in the orderly wind-up of
Seller's affairs, including the preparation of financial statements, tax
returns, Forms W-2 and similar administrative matters, (iii) as may be required
to enforce Seller's or its Affiliates' rights under this Agreement or the
Related Agreements and (iv) for information which is available to the public on
the Closing Date, or thereafter becomes available to the public other than as a
result of a breach of this Section 6.10.

      6.11 Software. If Purchaser does not obtain software or rights in software
under this Agreement or the Related Agreements which are necessary for Purchaser
to operate the plants located in Blandon, Pennsylvania or Summerville, South
Carolina as of the Closing Date in exactly the same manner as operated by Seller
in the Ordinary Course of Business, then Seller shall provide or cause to be
provided at Seller's expense such software or rights in such software necessary
to so operate such plants; provided, however, that this section shall not apply
to any of the software licensed to Seller pursuant to or in connection with the
agreements listed on Schedule 4.3. Any expenses incurred by Seller in complying
with this Section 6.11 shall be subject to the limitation on liability
provisions set forth in Section 8.4 as though such expenses were indemnifiable
Losses and/or payments dealt with under Article VIII, and such amounts shall be
aggregated with all other payments under Article VIII for purposes thereof.

      6.12 Access Easement. Seller will use its commercially reasonable efforts
to acquire from (a) F & P Holdings, Inc. (formerly known as Can Corporation of
America, Inc.) (referred herein as "F & P") and Greater Berks Development Fund
an access easement to use Girard Street and Woodward Street, which are private
streets owned by F&P and Greater Berks Development Fund, in order to gain access
to that portion of the Property known as Tract "B" identified on the survey
dated November 6, 2001 and prepared by SSM Group as Work No. 20279-00 ("Survey")
by way of that portion of June Avenue dedicated to the public, (b) the owner of
June Avenue (not dedicated to the public) an access easement to Tract B directly
from June Avenue (not dedicated to the Public), or (c) the owner of Emil Street
an access easement from Tract "B" to Tract "A" identified on the Survey. Seller
will commence its efforts by January 15, 2002. Seller will use commercially
reasonable efforts to keep Purchaser timely informed as to the status of its
efforts and the parties shall cooperate regarding such efforts. In the event
Seller transfers the Property to a third party, Seller shall nevertheless be
required to continue its effort hereunder and shall use commercially reasonable
efforts to require its transferee to reasonably cooperate with such efforts. For
purposes of this Section, commercially reasonable efforts shall include the
payment of any costs and fees in connection therewith, but in no event shall
such costs and fees exceed $60,000 including, without limitation, any attorneys
fees.

                                       29
<PAGE>

                                   ARTICLE VII

                                    CLOSING

      7.1 Closing. The Closing, and all transactions to occur at the Closing,
shall be deemed to have taken place at, and shall be effective as of, 11:59 p.m.
on the Closing Date.

      7.2 Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser the following:

            (a) the Assignment and Assumption Agreement in the form set forth in
      Exhibit A duly executed by Seller;

            (b) a Bill of Sale in the form set forth in Exhibit B duly executed
      by Seller;

            (c) an affidavit stating, under penalties of perjury, Seller's
      taxpayer identification number and that Seller is not a "foreign person"
      as defined in section 1445 of the Code;

            (d) certificates of title to any motor vehicles included in the
      Purchased Assets duly executed by Seller;

            (e) assignments with respect to any Owned Intellectual Property in
      the form of Exhibit I, title to which is registered, recorded or filed
      with any U.S. federal or state Governmental Authority, in form suitable
      for registration, recordation or filing with such Governmental Authority,
      in each case duly executed by Seller;

            (f) a certificate of the secretary or an assistant secretary of
      Seller certifying resolutions of the board of directors and stockholders
      of Seller approving and authorizing the execution, delivery and
      performance by Seller of this Agreement and its Related Agreements and the
      consummation by Seller of the transactions contemplated hereby and thereby
      (together with an incumbency and signature certificate regarding the
      officer(s) signing on behalf of Seller);

            (g) the certificate of incorporation of Seller, certified by the
      Secretary of State of Pennsylvania as of a recent date, and the by-laws of
      Seller, certified by the secretary or an assistant secretary of Seller;

            (h) a certificate of good standing for Seller from the Commonwealth
      of Pennsylvania and State of South Carolina as of a recent date;

            (i) the Guarantee Agreement in the form set forth in Exhibit C duly
      executed by International Building Materials, S.A.;

            (j) an opinion, dated the Closing Date, of Mayer, Brown & Platt,
      counsel to Seller, to the effect set forth in Exhibit F-1;

                                       30
<PAGE>

            (k) an opinion, dated the Closing Date, of Stevens & Lee,
      Pennsylvania counsel to Seller, to the effect set forth in Exhibit F-2;

            (l) an opinion, dated the Closing Date, of Hubert Debout, to the
      effect set forth in Exhibit F-3;

            (m) the Know-How License and Technical Support Agreement in the form
      set forth in Exhibit D duly executed by Redco S.A., Manasco S.A. and
      Seller;

            (n) Special Warranty Deeds, in the form of Exhibit H with respect to
      the transfer of the Non-Commercial Real Property, duly executed by Seller;

            (o) a certificate of a Director of International Building Materials,
      S.A. certifying resolutions of the board of directors of International
      Building Materials, S.A. approving and authorizing the execution, delivery
      and performance by it of the Guarantee Agreement and the consummation of
      the transactions contemplated thereby (together with an incumbency and
      signature certificate regarding the authorized signatories);

            (p) a certificate of a Director of each of Redco, S.A. and Manasco
      S.A. certifying resolutions of the board of directors of each such company
      approving and authorizing the execution, delivery and performance by each
      of them of the Know-How License and Technical Support Agreement and the
      consummation of the transactions contemplated thereby (together with
      incumbency and signature certificates regarding the authorized
      signatories);

            (q) the Side Letter in the form set forth in Exhibit J duly executed
      by International Building Materials, S.A.;

            (r) evidence of termination of the Eureka Agreement;

            (s) the Conversion Agreement duly executed by Seller; and

            (t) such other documents and instruments as may be required by any
      other provision of this Agreement or any Related Agreement or as may
      reasonably be required to consummate the transactions contemplated by this
      Agreement and the Related Agreements.

      7.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Seller the following:

            (a) the Assignment and Assumption Agreement duly executed by
      Purchaser;

            (b) the amount payable to Seller at the Closing pursuant to Section
      3.1(b);

            (c) a certificate of the secretary or an assistant secretary of
      Purchaser certifying resolutions of the board of directors of Purchaser
      approving and authorizing the execution, delivery and performance by
      Purchaser of this Agreement and its Related Agreements and the
      consummation by Purchaser of the transactions contemplated hereby

                                       31
<PAGE>

      and thereby (together with an incumbency and signature certificate
      regarding the officer(s) signing on behalf of Purchaser);

            (d) the certificate of incorporation of Purchaser, certified by the
      Secretary of State of the State of Nevada as of a recent date, and the
      by-laws of Purchaser, certified by the secretary or an assistant secretary
      of Purchaser;

            (e) a certificate of good standing for Purchaser from the State of
      Nevada as of a recent date;

            (f) tax resale certificates with respect to the Inventory duly
      executed by Purchaser;

            (g) the Guarantee Agreement in the form set forth in Exhibit C duly
      executed by Purchaser;

            (h) the Know-How License and Technical Support Agreement in the form
      set forth in Exhibit D duly executed by Purchaser;

            (i) the Side Letter in the form set forth in Exhibit J duly executed
      by Purchaser;

            (j) an opinion, dated the Closing Date, of Patton Boggs LLP, counsel
      to Purchaser and an opinion, dated the Closing Date, of McDonald Carano
      Wilson McCune Bergin Frankovich & Hicks LLP, Nevada counsel to Purchaser,
      to the effect set forth in Exhibit G;

            (k) the Conversion Agreement duly executed by Purchaser; and

            (l) such other documents and instruments as may be required by any
      other provision of this Agreement or any Related Agreement or as may
      reasonably be required to consummate the transactions contemplated by this
      Agreement and the Related Agreements.

                                  ARTICLE VIII

                                 INDEMNIFICATION

      8.1 Survival. The representations and warranties of the Parties and of
Redco S.A. and Manasco S.A. contained herein and in the Related Agreements shall
survive the Closing for a period of two (2) years after the Closing, except that
(i) Environmental Warranties and Know-How Warranties shall survive the Closing
for a period of five (5) years after the Closing, (ii) Tax Warranties shall
survive until the Tax Statute of Limitations Date, (iii) the representations and
warranties contained in Sections 5.6 and 5.7 and Title and Authorization
Warranties shall survive forever. Neither Purchaser, Seller, Redco S.A. nor
Manasco S.A. shall have any liability with respect to claims first asserted in
connection with any representation or warranty after the survival period
specified therefor in this Section 8.1.

                                       32
<PAGE>

      8.2 Indemnification by Seller. Subject to Section 8.4, Seller agrees to
indemnify Purchaser and its Affiliates against, and agrees to hold Purchaser and
its Affiliates harmless from, any and all Losses incurred or suffered by
Purchaser and its Affiliates arising out of any of the following:

            (a) any breach of or any inaccuracy in any representation or
      warranty (x) made by Seller in this Agreement or any Related Agreement or
      any document delivered by Seller at the Closing and specifically listed in
      Article VII and (y) made by Redco S.A. or Manasco S.A. in the Know-How
      License and Technical Support Agreement; provided, that neither Seller,
      Redco S.A. nor Manasco S.A. shall have any liability under this Section
      8.2(a) for any breach of or inaccuracy in any representation or warranty
      unless (i) in the case of all representations and warranties, except for
      Environmental Warranties, Know-How Warranties, Tax Warranties and Title
      and Authorization Warranties, a notice of Purchaser's claim is given to
      Seller not later than the close of business on the second anniversary of
      the Closing Date, (ii) in the case of Environmental Warranties and Know-
      How Warranties, a notice of Purchaser's claim is given to Seller not later
      than the close of business on the fifth anniversary of the Closing Date,
      and (iii) in the case of Tax Warranties, a notice of Purchaser's claim is
      given to Seller not later than the close of business on the Tax Statute of
      Limitations Date;

            (b) any breach of or failure (x) by Seller to perform any covenant
      or obligation of Seller set out in this Agreement or any Related Agreement
      or any document delivered by Seller at the Closing and specifically listed
      in Article VII and (y) by Redco S.A. or Manasco S.A. to perform any
      covenant or obligation of Redco S.A. or Manasco S.A. in the Know-How
      License and Technical Support Agreement; provided, that neither Seller,
      Redco S.A. nor Manasco S.A. shall have any liability under this Section
      8.2(b) for any breach or failure occurring on or prior to the Closing Date
      unless a notice of Purchaser's claim is given to Seller not later than the
      close of business on the second anniversary of the Closing Date; and
      provided, further, that neither Seller, Redco S.A. nor Manasco S.A. shall
      have any liability under this Section 8.2(b) with respect to any breach of
      the covenants contained in Article IV of the Know-How License and
      Technical Support Agreement; or

            (c) severance agreements entered into between Seller and the
      individuals listed on Schedule 8.2(c).

      8.3 Indemnification by Purchaser. Purchaser agrees to indemnify Seller and
its Affiliates against, and agrees to hold Seller and its Affiliates harmless
from, any and all Losses incurred or suffered by Seller and its Affiliates
arising out of any of the following:

            (a) any breach of or any inaccuracy in any representation or
      warranty made by Purchaser in this Agreement or any Related Agreement or
      any document delivered by Purchaser at the Closing and specifically listed
      in Article VII; provided, that Purchaser shall have no liability under
      this Section 8.3(a) for any breach of or inaccuracy in any representation
      or warranty unless in the case of all representations and warranties,
      except for Title and Authorization Warranties and the representations and
      warranties contained

                                       33
<PAGE>

      in Sections 5.6 and 5.7, a notice of Seller's claim is given to Purchaser
      not later than the close of business on the second anniversary of the
      Closing Date;

            (b) any breach of or failure by Purchaser to perform any covenant or
      obligation of Purchaser set out in this Agreement or any Related Agreement
      or any document delivered by Purchaser at the Closing and specifically
      listed in Article VII; provided, that Purchaser shall have no liability
      under this Section 8.3(b) for any breach or failure occurring on or prior
      to the Closing Date unless a notice of Seller's claim is given to
      Purchaser not later than the close of business on the second anniversary
      of the Closing Date;

            (c) (i) any act or failure to act, any transaction, or any facts or
      circumstances undertaken or caused by Purchaser with respect to the
      termination by Purchaser of any Purchaser's Employee subsequent to the
      Closing, (ii) any and all Liability arising under the Age Discrimination
      in Employment Act, Title VII of the Civil Rights Act of 1964 and the
      Americans with Disabilities Act from Purchaser's failure to offer
      employment to any of Seller's employees prior to or subsequent to, or at
      Closing, (iii) any and all Liability under the Worker Adjustment and
      Retraining Notification Act (including any Liabilities of Seller resulting
      from any failure to give advance notice to employees of employee
      terminations contemplated hereby) and any state or local Laws that are
      similar to any of the foregoing, and (iv) with respect to any Purchaser's
      Employee and events occurring after the Closing, any and all Liability
      under the Age Discrimination in Employment Act, Title VII of the Civil
      Rights Act of 1964, the National Labor Relations Act, the Fair Labor
      Standards Act, any state or local Laws that are similar to any of the
      foregoing and any and all common law causes of action including for breach
      of contract, defamation or retaliatory discharge, and any alleged right to
      workers' compensation benefits, unemployment compensation or statutory or
      contractual severance; or

            (d) the Assumed Obligations or, other than the Excluded Obligations,
      any debts, claims, obligations or other liabilities relating to or arising
      out of the ownership or operation after the Closing of the Assets or the
      business previously conducted by Seller prior to the Closing, including
      any changes to production processes by Purchaser.

      8.4 Limitations on Liability. Notwithstanding any other provision of this
      Agreement:

            (a) Purchaser shall have the right to payment by Seller under
      Section 8.2(a) only if, and only to the extent that, Purchaser shall have
      incurred (i) as to any particular inaccuracy or breach, indemnifiable
      Losses in excess of $20,000 and (ii) as to all inaccuracies and breaches,
      indemnifiable Losses (other than as excluded in clause (i)) in excess of
      $550,000.

            (b) Neither Seller, Redco S.A. nor Manasco S.A. shall have any
      liability under or in connection with this Agreement or the Related
      Agreements or the transactions contemplated hereby or thereby (including
      under Section 6.11, Section 8.2 or otherwise for any breach of or
      inaccuracy in any representation or warranty or for any breach of any
      covenant or obligation or for any other reason) in excess of (i) as to all
      representations, warranties, covenants, obligations and other reasons,
      other than Title and Authorization

                                       34
<PAGE>

      Warranties, $13,500,000 in the aggregate, and (ii) as to Title and
      Authorization Warranties, the Purchase Price in the aggregate; provided,
      that in no event shall Seller's, Redco S.A.'s and Manasco S.A.'s aggregate
      liability for any and all matters referred to in clauses (i) and (ii)
      exceed the Purchase Price in the aggregate.

            (c) Seller shall have the right to payment by Purchaser under
      Section 8.3(a) only if, and only to the extent that, Seller shall have
      incurred (i) as to any particular inaccuracy or breach, indemnified Losses
      in excess of $20,000 and (ii) as to all inaccuracies and breaches,
      indemnifiable Losses (other than as excluded in clause (i)) in excess of
      $550,000; provided, however, that the foregoing limitations shall not
      apply to any breach of or inaccuracy in the representations and warranties
      set forth in Section 5.6 or 5.7.

            (d) Purchaser shall have no liability under or in connection with
      this Agreement or the Related Agreements or the transactions contemplated
      hereby or thereby (including under Section 8.3 or otherwise for any breach
      of or inaccuracy in any representation or warranty or for any breach of
      any covenant or obligation or for any other reason) in excess of (i) as to
      all representations, warranties, covenants, obligations and other reasons,
      other than Title and Authorization Warranties and the representations and
      warranties set forth in Section 5.6 or 5.7, $13,500,000 in the aggregate,
      and (ii) as to Title and Authorization Warranties, the Purchase Price in
      the aggregate; provided, that in no event shall Purchaser's aggregate
      liability for any and all matters referred to in clause (i) and (ii)
      exceed the Purchase Price in the aggregate. The obligation of Purchaser to
      indemnify Seller for a breach of representation or warranty set forth in
      Section 5.6 or 5.7 shall have no limit.

            (e) No party to this Agreement or the Related Agreements shall have
      any liability hereunder or thereunder or arising in connection herewith or
      therewith for special, speculative, punitive, indirect or consequential
      damages or for lost profits.

            (f) The sole and exclusive liability and responsibility of Seller
      and its Affiliates to Purchaser and its Affiliates and of Purchaser and
      its Affiliates to Seller and its Affiliates under or in connection with
      the Assets or this Agreement or the Related Agreements or the transactions
      contemplated hereby or thereby (including for any breach of or inaccuracy
      in any representation or warranty or for any breach of any covenant or
      obligation or for any other reason), and the sole and exclusive remedy of
      either Party and their Affiliates with respect to any of the foregoing,
      shall be as set forth in this Article VIII and in Section 6.4; provided,
      however, that the foregoing is not intended to limit any party's ability
      to obtain injunctive relief to the extent specifically permitted in the
      Know-How License and Technical Support Agreement; and provided, further,
      that this Article VIII shall not apply to Article IV of the Know-How
      License and Technical Support Agreement and that the Parties' acknowledge
      and agree that Purchaser shall not be precluded from enforcing its rights
      against Cemplank, Redco S.A. or Manasco S.A. under the Know-How License
      And Technical Support Agreement but that the limitations on liability set
      forth in Section 8.4 hereof shall apply thereto (except to Article IV of
      the Know-How License and Technical Support Agreement).

                                       35
<PAGE>

            (g) To the extent that Purchaser or any of its Affiliates has any
      Losses for which it may assert any other right to indemnification,
      contribution or recovery from Seller or any of its Affiliates (except as
      provided in Section 8.4(f), whether under this Agreement or under any
      common law or any statute, including any Environmental Law, or otherwise),
      Purchaser hereby waives, releases and agrees not to assert such right, and
      Purchaser agrees to cause each of its Affiliates to waive, release and
      agree not to assert such right. Notwithstanding the foregoing, nothing in
      this Section 8.4 shall limit or restrict either Party's right to maintain
      or recover on any action based upon common law fraud.

            (h) For the avoidance of doubt, all payments made by Seller under
      Section 6.11 hereof and this Article VIII shall be aggregated with all
      payments made under the Guarantee Agreement for purposes of determining
      whether the limitations on liability set forth in the Guarantee Agreement
      (and under this Agreement) have been satisfied.

      8.5 Claims. As promptly as is reasonably practicable after becoming aware
of a claim for indemnification under this Agreement not involving a claim, or
the commencement of any suit, action or proceeding, of the type described in
Section 8.6, but in any event no later than ten (10) Business Days after first
becoming aware of such claim, the Indemnified Person shall give notice to the
Indemnifying Person of such claim, which notice shall specify the facts alleged
to constitute the basis for such claim, the representations, warranties,
covenants and obligations alleged to have been breached and the amount that the
Indemnified Person seeks hereunder from the Indemnifying Person, together with
such information as may be necessary for the Indemnifying Person to determine
that the limitations in Section 8.4 have been satisfied or do not apply;
provided, that the failure of the Indemnified Person to give such notice shall
not relieve the Indemnifying Person of its obligations under this Article VIII
except to the extent (if any) that the Indemnifying Person shall have been
prejudiced thereby.

      8.6 Notice of Third Party Claims: Assumption of Defense. The Indemnified
Person shall give notice as promptly as is reasonably practicable, but in any
event no later than five (5) Business Days after receiving notice thereof, to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement (which notice shall specify
in reasonable detail the nature and amount of such claim together with such
information as may be necessary for the Indemnifying Person to determine that
the limitations in Section 8.4 have been satisfied or do not apply); provided,
that the failure of the Indemnified Person to give such notice shall not relieve
the Indemnifying Person of its obligations under this Article VIII except to the
extent (if any) that the Indemnifying Person shall have been prejudiced thereby.
The Indemnifying Person may, at its own expense, (a) participate in the defense
of any such claim, suit, action or proceeding and (b) upon notice to the
Indemnified Person, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof with counsel of its own choice
and in the event of such assumption, shall have the exclusive right, subject to
clause (i) of Section 8.7, to settle or compromise such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person. Whether or not the Indemnifying

                                       36
<PAGE>

Person chooses to defend or prosecute any such claim, suit, action or
proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.

      8.7 Settlement or Compromise. Any settlement or compromise made or caused
to be made by the Indemnified Person (unless the Indemnifying Person has the
exclusive right to settle or compromise under clause (b) of Section 8.(6)) or
the Indemnifying Person, as the case may be, of any such claim, suit, action or
proceeding of the kind referred to in Section 8.6 shall also be binding upon the
Indemnifying Person or the Indemnified Person, as the case may be, in the same
manner as if a final judgment or decree had been entered by a court of competent
jurisdiction in the amount of such settlement or compromise; provided, that (i)
no obligation, restriction or Loss shall be imposed on the Indemnified Person as
a result of such settlement or compromise without its prior written consent,
which consent shall not be unreasonably withheld, and (ii) the Indemnified
Person will not compromise or settle any claim, suit, action or proceeding
without the prior written consent of the Indemnifying Person, which consent
shall not be unreasonably withheld.

      8.8 Time Limits. Any right to indemnification or other recovery under this
Article VIII shall only apply to Losses with respect to which the Indemnified
Person shall have notified the Indemnifying Person within the applicable time
period set forth in Section 8.2 or 8.3, as the case may be. If any claim for
indemnification or other recovery is timely asserted under this Article VIII,
the Indemnified Person shall have the right to bring an action, suit or
proceeding with respect to such claim within one year after first giving the
Indemnifying Person notice thereof, but may not bring any such action, suit or
proceeding thereafter.

      8.9 Knowledge. Notwithstanding anything contained herein to the contrary,
no party shall have (a) any liability for any breach of or inaccuracy in any
representation or warranty by such party, if the other party or any of its
officers, employees, counsel or other representatives (i) had knowledge at or
before the Closing of the facts as a result of which such representation or
warranty was breached or inaccurate or (ii) received at or before the Closing a
document disclosing such facts or (b) any liability after the Closing for any
breach of or failure to perform any covenant or obligation of such party if the
other party or any of its officers, employees, counsel or other representatives
(i) had knowledge at or before the Closing of such breach or failure or (ii)
received at or before the Closing a document disclosing such breach or failure.

      8.10 Net Losses and Subrogation.

            (a) Notwithstanding anything contained herein to the contrary, the
      amount of any Losses incurred or suffered by any Indemnified Person shall
      be calculated after giving effect to (i) any insurance proceeds received
      by the Indemnified Person (or any of its Affiliates) with respect to such
      Losses, (ii) any Tax benefit realized by the Indemnified Person (or any of
      its Affiliates) arising from the facts or circumstances giving rise to
      such Losses and (iii) any recoveries obtained by the Indemnified Person
      (or any of its Affiliates) from any other third party. Each Indemnified
      Person shall exercise commercially reasonable efforts to obtain such
      proceeds, benefits and recoveries. If any such proceeds, benefits or
      recoveries are received by an Indemnified Person (or any of its
      Affiliates) with respect to any Losses after an Indemnifying Person has
      made a payment to the Indemnified Person with respect thereto, the
      Indemnified Person (or such Affiliate)

                                       37
<PAGE>

      shall pay to the Indemnifying Person the amount of such proceeds, benefits
      or recoveries (up to the amount of the Indemnifying Person's payment).

            (b) Upon making any payment to an Indemnified Person in respect of
      any Losses, the Indemnifying Person will, to the extent of such payment,
      be subrogated to all rights of the Indemnified Person (and its Affiliates)
      against any third party in respect of the Losses to which such payment
      relates. Such Indemnified Person (and its Affiliates) and Indemnifying
      Person will execute upon request all instruments reasonably necessary to
      evidence or further perfect such subrogation rights.

      8.11 Purchase Price Adjustments. To the extent permitted by Law, any
amounts payable under Section 8.2 or Section 8.3 shall be treated by Purchaser
and Seller as an adjustment to the Purchase Price.

                                   ARTICLE IX

                                  MISCELLANEOUS

      9.1 Expenses. Each party hereto shall bear its own fees and expenses with
respect to the transactions contemplated hereby, provided, that Purchaser shall
pay (a) all sales, use, value added, stamp, transfer, service, recording and
like taxes and fees imposed by any Governmental Authority in connection with the
transfer and assignment of the Purchased Assets and (b) all costs of obtaining
surveys and title commitments and insurance and all applicable recording fees
with respect to the Non-Commercial Real Property.

      9.2 Amendment. This Agreement may be amended, modified or supplemented but
only in writing signed by Purchaser and Seller.

      9.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service, or (b) on the date of transmission if sent by facsimile transmission
(receipt confirmed) on a Business Day during or before the normal business hours
of the intended recipient, and if not so sent on such a day and at such a time,
on the following Business Day:

                (i)   If to Purchaser, addressed as follows:

                      James Hardie Building Products, Inc.
                      26300 La Alameda, Suite 100
                      Mission Viejo, CA 92691
                      Attention: President
                      Telephone: (943) 348-1800
                      Facsimile: (949) 367-9391

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<PAGE>

                      with a copy to:

                      Patton Boggs LLP
                      8484 Westpark Drive, 9th Floor
                      McLean, VA 22102
                      Attention: James N. Schwarz, Esq.
                      Telephone: (703) 744-8090
                      Facsimile: (703) 744-8001

                (ii)  If to Seller, addressed as follows:

                      Cemplank, Inc.
                      c/o Maiden Creek, Inc.
                      P.O. Box 2100
                      Sinking Spring, PA 12608-2100
                      Attention: President
                      Telephone: (610) 670-2623
                      Facsimile: (610) 670-2168

                      with a copy to:

                      Mayer, Brown & Platt
                      190 South LaSalle Street
                      Chicago, Illinois 60603
                      Attention: Frederick B. Thomas, Esq.
                      Telephone: (312) 782-0600
                      Facsimile: (312) 701-7711

or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.

      9.4 Payments in Dollars. Except as otherwise provided herein or in a
Related Agreement, all payments pursuant hereto shall be made by wire transfer
in Dollars in same day or immediately available funds without any set-off,
deduction or counterclaim whatsoever.

      9.5 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.

      9.6 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; provided, that no assignment

                                       39
<PAGE>

of any rights or obligations hereunder, by operation of law or otherwise, shall
be made by either party without the written consent of the other party.

      9.7 Third Party Beneficiaries. International Building Materials, S.A.
shall be a third party beneficiary of this Agreement and shall be entitled to
enforce the rights granted to Seller to the full extent enforceable by Seller.
Redco S.A. and Manasco S.A. shall be third party beneficiaries with respect to
Article VIII of this Agreement and shall be entitled to enforce the rights
granted thereunder to the full extent enforceable by Seller. Other than as
specifically described in this Section 9.7, this Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective Affiliates, and no provision of this Agreement shall be deemed to
confer upon other third parties any remedy, claim, liability, reimbursement,
cause of action or other right.

      9.8 Publicity. Prior to the Closing Date, no public announcement or other
publicity regarding the existence of this Agreement or its contents or the
transactions contemplated hereby shall be made by Purchaser, Seller or any of
their respective Affiliates, officers, directors, employees, representatives or
agents, without the prior written agreement of Purchaser and Seller, in any
case, as to form, content, timing and manner of distribution or publication. On
and after the Closing Date, each of Seller and Purchaser agree to hold
confidential the terms and provisions of this Agreement and the terms of the
transactions contemplated hereby. Notwithstanding the foregoing, nothing in this
Section 9.8 shall prevent either party or its Affiliates from (a) making any
public announcement or disclosure required by Law or the rules of any stock
exchange, (b) discussing this Agreement or its contents or the transactions
contemplated hereby with officers, directors, employees, representatives and
agents of such party and its Affiliates and with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
particular transaction or transactions, or (c) enforcing its rights hereunder.

      9.9 Further Assurances. Upon the reasonable request of Purchaser, Seller
shall on and after the Closing Date execute and deliver to Purchaser such deeds,
assignments and other instruments as may be reasonably requested by Purchaser
and are required to effectuate completely the transfer and assignment to
Purchaser of Seller's right, title and interest in and to each of the Purchased
Assets, and to otherwise carry out the purposes of this Agreement.

      9.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.

      9.11 Entire Understanding. This Agreement, the Related Agreements and the
documents specifically listed in Article VII set forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby and supersede any and all prior agreements, arrangements and
understandings among the parties relating to the subject matter hereof.

                                       40
<PAGE>

      9.12 Language. Seller and Purchaser agree that the language used in this
Agreement is the language chosen by the parties to express their mutual intent,
and that no rule of strict construction is to be applied against Seller or
Purchaser.

      9.13 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
giving effect to the principles of conflicts of law thereof, except that South
Carolina law shall govern with respect to the transfer of title by Seller to
Purchaser of the Non-Commercial Real Property.

      9.14 Remittances. All remittances, payments, mail and other communications
relating to the Purchased Assets or the Assumed Obligations received by Seller
at any time after the Closing Date shall be promptly turned over to Purchaser by
Seller. All remittances, payments, mail and other communications relating to the
Excluded Assets or the Excluded Obligations received by Purchaser at any time
after the Closing Date shall be promptly turned over to Seller by Purchaser.

      9.15 Bulk Sales. Purchaser hereby waives compliance by Seller with the
provisions of the Laws of any jurisdiction relating to the bulk sale or transfer
of assets that may be applicable to the transfer of the Purchased Assets.

      9.16 Jurisdiction of Disputes; Waiver of Jury Trial. In the event either
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement, any Related Agreement
or any matters contemplated hereby or thereby, each party to this Agreement
hereby (a) agrees that any such litigation, proceeding or other legal action may
be brought in a court of competent jurisdiction located within the County of New
York, in the State of New York, whether a state or federal court; (b) agrees
that in connection with any such litigation, proceeding or action, such party
will consent and submit to personal jurisdiction in any such court described in
clause (a) of this Section 9.16 and to service of process upon it in accordance
with the rules and statutes governing service of process; (c) agrees to waive to
the full extent permitted by law any objection that it may now or hereafter have
to the venue of any such litigation, proceeding or action in any such court or
that any such litigation, proceeding or action was brought in an inconvenient
forum; (d) designates, appoints and directs CT Corporation System as its
authorized agent to receive on its behalf service of any and all process and
documents in any such litigation, proceeding or action in the State of New York;
(e) agrees to notify the other party to this Agreement immediately if such agent
shall refuse to act, or be prevented from acting, as agent and, in such event,
promptly to designate another agent in the State of New York to serve in place
of such agent and deliver to the other party written evidence of such substitute
agent's acceptance of such designation; (f) agrees as an alternative method of
service to service of process in any such litigation, proceeding or action by
mailing of copies thereof to such party at its address set forth in Section 9.3;
(g) agrees that any service made as provided herein shall be effective and
binding service in every respect; and (h) agrees that nothing herein shall
affect the rights of either party to effect service of process in any other
manner permitted by Law. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY
IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY OR THEREBY, AND AGREES TO TAKE ANY
AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

                                       41
<PAGE>

      9.17 Schedules. Any information disclosed pursuant to any Schedule hereto
or otherwise disclosed to Purchaser in writing shall be deemed to be disclosed
to Purchaser for all purposes of this Agreement. Neither the specification of
any Dollar amount or any item or matter in any provision of this Agreement nor
the inclusion of any specific item or matter in any Schedule hereto is intended
to imply that such amount, or higher or lower amounts, or the item or matter so
specified or included, or other items or matters, are or are not material, and
no party shall use the fact of the specification of any such amount or the
specification or inclusion of any such item or matter in any dispute or
controversy between the parties as to whether any item or matter not specified
herein or included in any Schedule hereto is or is not material for purposes of
this Agreement. Neither the specification of any item or matter in any provision
of this Agreement nor the inclusion of any specific item or matter in any
Schedule hereto is intended to imply that such item or matter, or other items or
matters, are or are not in the Ordinary Course of Business, and no party shall
use the fact of the specification or the inclusion of any such item or matter in
any dispute or controversy between the parties as to whether any item or matter
not specified herein or included in any Schedule hereto is or is not in the
Ordinary Course of Business for purposes of this Agreement.

      9.18 Disclaimer of Warranties. Seller makes no representations or
warranties with respect to any projections, forecasts or forward-looking
statements provided to Purchaser. There is no assurance that any projected or
forecasted results will be achieved. EXCEPT TO THE EXTENT OF THE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV, SELLER IS SELLING THE
PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS AND DISCLAIMS ALL OTHER
WARRANTIES, REPRESENTATIONS AND GUARANTEES, WHETHER EXPRESS OR IMPLIED. SELLER
MAKES NO REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER. Purchaser acknowledges
and agrees that neither Seller, its Affiliates, any of their representatives nor
any other Person has made any representation or warranty, express or implied, as
to the accuracy or completeness of any memoranda, charts, summaries, schedules
or other information heretofore made available by Seller, its Affiliates or
their representatives to Purchaser, any of its Affiliates or their
representatives (including the Confidential Information Memorandum dated May
2001 prepared by Bear, Stearns & Co. Inc.) or any information that is not
included in this Agreement or the Schedules hereto, and neither Seller, its
Affiliates, any of their representatives nor any other Person will have or be
subject to any liability to Purchaser, any of its Affiliates or their
representatives resulting from the distribution of any suck information to, or
the use of any such information by, Purchaser, any of its Affiliates or any of
their agents, consultants, accountants, counsel or other representatives.

      9.19 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                                      * * *

                                       42
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed and delivered as of the date first above written.

                                            JAMES HARDIE BUILDING PRODUCTS, INC.

                                            By: /s/ Peter D. Macdonald
                                                --------------------------------
                                            Name: Peter D. Macdonald
                                            Title: Attorney-in-Fact

                                            CEMPLANK, INC.

                                            By: /s/ Toussaint P. Dolmans
                                                --------------------------------
                                            Name: Toussaint P. Dolmans
                                            Title: President

                                       43

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