Exhibit 10.32

AGREEMENT FOR PURCHASE AND SALE

OF

PARTNERSHIP INTERESTS

IN

STANDARD GYPSUM, L.P.

THIS IS AN AGREEMENT FOR PURCHASE AND SALE dated as of January 17, 2006 by and
among TIN INC., a Delaware corporation f/k/a Temple-Inland Forest Products
Corporation (“TIN”), TEMPLE GYPSUM COMPANY, a Nevada corporation (“TGC”), GYPSUM
MGC, INC., a Delaware corporation (“Gypsum”), MCQUEENY GYPSUM COMPANY, LLC, a
Delaware limited liability company (“MGC”), and CARAUSTAR INDUSTRIES, INC., a
North Carolina corporation (“Caraustar”).

BACKGROUND STATEMENT

TIN and Gypsum are the general partners, with each owning a one percent
(1%) general partnership interest, and TGC and MGC are the limited partners,
with each owning a forty nine percent (49%) limited partnership interest, of
Standard Gypsum, L.P., a Delaware limited partnership (the “Partnership”). TIN
and TGC are wholly owned subsidiaries of Temple-Inland Inc., a Delaware
corporation (“Temple-Inland”). Gypsum and MGC are wholly owned subsidiaries of
Caraustar. TIN desires to purchase the general partnership interest in the
Partnership owned by Gypsum (the “GP Interest”) and TGC desires to purchase the
limited partnership interest in the Partnership owned by MGC (the “LP Interest”
and collectively with the GP Interest, the “Partnership Interests”). The parties
are entering into this Agreement to set forth the terms and conditions of such
transactions and certain related matters.

STATEMENT OF AGREEMENT

In consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

ARTICLE 1

Definitions; Interpretation

1.1 Definitions. For purposes of this Agreement, the following terms shall have
the meanings ascribed to them below:

“Affiliate” of any Person means any other Person of which such Person is a
shareholder, member, director, officer, manager, partner or employee, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person.

“Agreement” means this Agreement for Purchase and Sale of Partnership Interests,
as amended from time to time as provided herein.

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“Ancillary Instrument” means any agreement or instrument of conveyance
contemplated by this Agreement to be delivered by one or more parties to this
Agreement.

“Business Day” means any day excluding a Saturday, a Sunday and any other day on
which banks are required or authorized to close in New York City.

“Caraustar” is defined in the Preamble to this Agreement.

“Closing” is defined in Section 2.4.

“Closing Date” is defined in Section 2.4.

“Closing Distribution” is defined in Section 5.2.

“Code” means the Internal Revenue Code of 1986, as it may hereafter be amended
from time to time, and any successor statute or statutes thereto.

“Effective Time” is defined in Section 2.4.

“Formation Agreement” means that certain Agreement to Form LLC effective as of
April 1, 1996 by and among Caraustar, Standard Gypsum Corporation, a Texas
corporation, and TIN.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any other Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

“GP Interest” is defined in the Background Statement to this Agreement.

“Gypsum” is defined in the Preamble to this Agreement.

“Lien” means any lien, security interest, pledge, charge, option, right of first
refusal, claim, mortgage, lease, restriction or any other encumbrance
whatsoever.

“Loan Agreement” is defined in Section 5.6.

“LP Interest” is defined in the Background Statement to this Agreement.

“Material Adverse Effect” with respect to any Person other than the Partnership,
means any fact, circumstance, event, violation, development, change in or effect
on such Person that individually or in the aggregate with any other facts,
circumstances, events, violations, developments, changes in or effects on such
Person is materially adverse to the business, financial condition, results of
operation, assets, properties or liabilities of such Person.

 

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“MGC” is defined in the Preamble to this Agreement.

“Mutual Release” is defined in Section 2.6(a)(v).

“Nondisclosure Agreement” is defined in Section 2.6(a)(iv).

“Partnership” is defined in the Background Statement to this Agreement.

“Partnership Agreement” means that certain Partnership Agreement of Standard
Gypsum, L.P. dated December 31, 2000, as amended from time to time as provided
therein.

“Partnership Interests” is defined in the Background Statement to this
Agreement.

“Partnership Material Adverse Effect” means any fact, circumstance, event,
violation, development, change in or effect on the Partnership that individually
or in the aggregate with any other facts, circumstances, events, violations,
developments, changes in or effects on the Partnership is materially adverse to
the business, financial condition, results of operation, assets, properties or
liabilities of the Partnership; provided, however, that any termination of the
Partnership for tax purposes or otherwise resulting from the transactions
contemplated herein shall not constitute a Partnership Material Adverse Effect.

“Permitted Restriction” means transfer and other restrictions arising under the
Partnership Agreement.

“Person” means an individual, partnership, corporation, limited liability
company, joint venture, business trust or unincorporated organization,
Governmental Authority or any other entity.

“Purchase Price” is defined in Section 2.2.

“Purchaser” means either TIN or TGC, individually, and “Purchasers” means TIN
and TGC, collectively.

“Seller” means either Gypsum or MGC, individually, and “Sellers” means Gypsum
and MGC, collectively.

“Supply Agreement” is defined in Section 2.6(a).

“Temple-Inland” is defined in the Background Statement to this Agreement.

“TGC” is defined in the Preamble to this Agreement.

“TIN” is defined in the Preamble to this Agreement.

1.2 Accounting Terms and Determinations. All accounting terms used in this
Agreement and not otherwise defined shall have the meaning ascribed to them in
accordance with GAAP and, except as expressly provided herein, all accounting
determinations shall be made in accordance with GAAP, consistently applied.

 

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1.3 Interpretation.

(a) Schedules, Exhibits, Sections. References to a “Schedule” or an “Exhibit”
are, unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement and references to a “Section” or a “subsection” are, unless otherwise
specified, to a Section or a subsection of this Agreement.

(b) Plural. Wherever from the context it appears appropriate, each term stated
in either the singular or the plural shall include the singular and the plural,
and pronouns stated in the masculine, the feminine or neuter gender shall
include the masculine, the feminine and the neuter.

(c) Captions. Captions contained in this Agreement are inserted only as a matter
of convenience and in no way define, limit or extend or otherwise affect the
scope or intent of this Agreement or any provision hereof.

(d) Including. “Including” and other words or phrases of inclusion, if any,
shall not be construed as terms of limitation, so that references to “included”
matters shall be regarded as non-exclusive, non-characterizing illustrations,
and equivalent to the terms “including, but not limited to,” and “including,
without limitation.”

ARTICLE 2

Purchase and Sale of the Partnership Interests

2.1 Purchase and Sale of the Partnership Interests. At the Closing and on the
terms and subject to the conditions set forth in this Agreement: (i) Gypsum
shall sell, transfer, convey, deliver and assign to TIN, and TIN shall purchase
from Gypsum the GP Interest, free and clear of all Liens other than Permitted
Restrictions, for the consideration provided herein; and (ii) MGC shall sell,
transfer, convey, deliver and assign to TGC, and TGC shall purchase from MGC the
LP Interest, free and clear of all Liens other than Permitted Restrictions, for
the consideration provided herein.

2.2 Purchase Price. At the Closing, Purchasers shall pay to Sellers the
aggregate sum of One Hundred Fifty Million Dollars ($ 150,000,000.00) as the
purchase price for the Partnership Interests (the “Purchase Price”). Ninety
eight percent (98%) of the Purchase Price shall be paid by TGC to MGC as the
consideration for the LP Interest and two percent (2%) of the Purchase Price
shall be paid by TIN to Gypsum as the consideration for the GP Interest.

2.3 Indemnity and Hold Harmless. From and after the Closing, TIN shall
indemnify, defend and hold harmless Caraustar and Sellers, and their successors
and assigns, from and against any and all liabilities and obligations of the
Partnership; provided, however, TIN shall not be required to indemnify, defend
and hold harmless Caraustar and Sellers from any such liability or obligation to
the extent it arose or results from or relates to: (i) the gross negligence,
willful misconduct or fraud of Caraustar or any Seller; (ii) any action taken
without the actual knowledge, express consent or

 

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conscious acquiescence of any Purchaser by Caraustar or any Seller that
constitutes a breach of the Partnership Agreement; (iii) any action by MGC that
results in MGC having liability for the obligations of the Partnership under
Section 17-303 of the Delaware Revised Uniform Limited Partnership Act; (iv) any
of the matters on which Caraustar has agreed to provide indemnification as
pursuant to Section 5.7 of this Agreement, as limited by Section 5.8 of this
Agreement; or (v) a final and non-appealable judicial determination that the
corporate identity of Gypsum be “pierced” or disregarded for the purpose of
discharging liabilities or obligations otherwise attributable to Gypsum. Nothing
in this Section 2.3 shall be construed or interpreted to obligate TIN to
indemnify or reimburse Caraustar or any Seller for the return of any
distribution made by the Partnership that may be required pursuant to the
provisions of Section 17-607 of the Delaware Revised Uniform Limited Partnership
Act; provided, however, that to the extent that any such distribution that is
required to be returned pursuant to the provisions of Section 17-607 of the
Delaware Revised Uniform Limited Partnership Act would be deemed permissible if
distributed at any other time subsequent to the date of such distribution and
prior to the Closing Date, taking into account distributions made during such
period, TIN agrees to return to Sellers or their successors and assigns any such
distribution or portion thereof that Sellers or Caraustar or their successors
and assigns were required to disgorge.

2.4 The Closing. Consummation of the purchase and sale of the Partnership
Interests as described in this Article 2 (the “Closing”) shall take place at
10:00 a.m. at the offices of Sutherland Asbill & Brennan LLP, 999 Peachtree
Street, NE, Atlanta, GA 30309, on a date to be specified by the parties, which
date shall be no later than two Business Days after satisfaction or waiver of
all of the conditions set forth in Section 2.5, but in no event earlier than
January 3, 2006 (the “Closing Date”). At the Closing, the parties shall deliver
the agreements, instruments and documents described in Section 2.6 and such
other instruments of conveyance and such other documentation as the other may
reasonably request to confirm Purchaser’s right, title and interest to the
Partnership Interests. Notwithstanding the foregoing, the Closing shall not
occur unless and until all of the actions and deliveries contemplated by this
Agreement shall have been taken or made (or waived) and none of such actions or
deliveries shall be deemed to have been taken or made unless and until all of
them have been taken or made (or waived); but if all such actions and deliveries
have been taken and made (or appropriately waived), then the Closing shall be
effective as of 12:01 a.m. Central Standard Time on January 1, 2006 (the
“Effective Time”).

2.5 Conditions to Closing.

(a) Conditions to Each Party’s Obligation to Close. The obligations of
Purchasers, on the one hand, and Caraustar and Sellers, on the other hand, to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction (or, if permissible, waiver by the party for whose benefit such
condition exists) of the following conditions:

(i) Since the date of this Agreement, no action shall have been commenced,
instituted or threatened in writing by or before any Governmental Authority that
has not been withdrawn, dismissed with prejudice, rescinded or otherwise
eliminated either (A) to enjoin or otherwise prohibit or restrict the
performance of this Agreement, (B) to obtain material damages against any party
in

 

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respect of the execution, delivery and performance of this Agreement, or
(C) which, in the reasonable judgment of Purchasers, could reasonably be
expected to have a Partnership Material Adverse Effect; and

(ii) All necessary consents, approvals, authorizations, clearances, exemptions,
declarations or filings with, or expiration or waiver of waiting periods imposed
by, any Governmental Authority required for the consummation of the transactions
contemplated by this Agreement shall have been filed, expired, obtained or
otherwise satisfied.

(b) Conditions to Obligations of Purchasers. The obligations of Purchasers to
consummate the transactions contemplated by this Agreement are further subject
to the satisfaction or waiver of the following conditions:

(i) Each of the representations and warranties of Caraustar and Sellers shall be
true and correct in all material respects (or true and correct in the case of
any such representation or warranty that is qualified by the words “material” or
“materially”) both when made and at and as of the Closing Date as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such date);

(ii) Caraustar and Sellers shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing;

(iii) Since the date of this Agreement, there shall not have been any
Partnership Material Adverse Effect;

(iv) At or prior to Closing, Caraustar and Sellers shall have delivered the
items described in Section 2.6(b); and

(v) Purchasers shall have received all consents from Persons other than
Governmental Authorities, the failure of which to obtain would have a
Partnership Material Adverse Effect, and none of such consents shall have been
given on terms that have a Partnership Material Adverse Effect or a Material
Adverse Effect on any Purchaser.

(c) Conditions to Obligations of Caraustar and Sellers. The obligations of
Caraustar and Sellers to consummate the transactions contemplated by this
Agreement are further subject to the satisfaction or waiver of the following
conditions:

(i) Each of the representations and warranties of Purchasers shall be true and
correct in all material respects (or true and correct in the case of any such
representation or warranty that is qualified by the words “material” or
“materially”) both when made and at and as of the Closing Date as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such date);

 

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(ii) Purchasers shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the
Closing;

(iii) At or prior to Closing, Purchasers shall have delivered the items
described in Section 2.6(a); and

(iv) Caraustar shall have received all consents from Persons other than
Governmental Authorities, the failure of which to obtain would have a Material
Adverse Effect on Caraustar and the Sellers, taken as a whole, and none of such
consents shall have been given on terms that materially and adversely affect the
Caraustar and the Sellers, taken as a whole.

2.6 Deliveries at Closing.

(a) By Purchasers. At the Closing, Purchasers shall deliver or shall cause to be
delivered to Caraustar and Sellers the following items:

(i) The Purchase Price by wire transfer of immediately available funds to an
account or accounts designated by Sellers in writing no later than one Business
Day prior to the Closing Date;

(ii) A certificate executed by an executive officer of each Purchaser, dated as
of the Closing Date, stating that the conditions set forth in Sections 2.5(a)
and (c) (i) – (iii) hereof have been satisfied;

(iii) A supply agreement in substantially the form of Exhibit A attached hereto
(the “Supply Agreement”), duly executed by TIN;

(iv) A nondisclosure agreement in substantially the form of Exhibit B attached
hereto (the “Nondisclosure Agreement”); and

(v) A mutual release in substantially the form of Exhibit C attached hereto,
duly executed by the Partnership and the Purchasers (the “Mutual Release”).

(b) By Caraustar and Sellers. At the Closing, Caraustar and Sellers shall
deliver or shall cause to be delivered to Purchasers the following items:

(i) A certificate executed by an executive officer of Caraustar and each Seller,
dated as of the Closing Date, stating that the conditions set forth in Sections
2.5(a) and (b)(i), (ii) and (iv) hereof have been satisfied;

(ii) Any certificate representing the Partnership Interests and instruments of
assignment, in form reasonably satisfactory to Purchasers, for the transfer and
assignment of each of the Partnership Interests to the applicable Purchaser,
duly executed by the applicable Seller;

 

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(iii) The Supply Agreement, duly executed by Caraustar;

(iv) The Nondisclosure Agreement, duly executed by Caraustar and Sellers;

(v) The Mutual Release, duly executed by Caraustar and Sellers;

(vi) The resignations of those members of the Management Committee of the
Partnership designated by Gypsum; and

(vii) The resignations of those current officers of the Partnership that are
employed by Caraustar, Gypsum and/or MGC.

2.7 Termination. This Agreement may be terminated and the transactions
contemplated herein abandoned at any time prior to the Closing:

(a) By mutual written consent of Purchasers, Caraustar and Sellers.

(b) By Purchasers, on the one hand, or Caraustar and Sellers, on the other hand,
if the Closing shall have not occurred on or prior to January 31, 2006,
including by reason of the failure to satisfy any condition set forth in
Section 2.5(a); provided, however, that the right to terminate this Agreement
pursuant to this Section 2.7(b) shall not be available to any party whose
failure to perform or comply with any of its obligations or breach of any of its
representations and warranties under this Agreement results in the failure of
the Closing to have occurred by such time.

(c) By Purchasers if: (i) Caraustar or any Seller (A) breaches any of its
representations and warranties such that the condition set forth in
Section 2.5(b)(i) would not be satisfied or (B) breaches or fails in any
material respect to perform or comply with any of its covenants or other
agreements contained in this Agreement such that the condition set forth in
Section 2.5(b)(ii) would not be satisfied; provided; however, that if any such
breach is curable by Caraustar or such Seller through the exercise of
Caraustar’s or Seller’s reasonable best efforts and for so long as Caraustar or
Seller shall be using its reasonable best efforts to cure such breach,
Purchasers may not terminate this Agreement pursuant to this Section 2.7(c); or
(ii) a Partnership Material Adverse Effect shall have occurred since the date of
this Agreement.

(d) By Caraustar and Sellers if Purchaser (i) breaches any of its
representations and warranties such that the condition set forth in
Section 2.5(c)(i) would not be satisfied or (ii) breaches or fails in any
material respect to perform or comply with any of its covenants or other
agreements contained in this Agreement such that the condition set forth in
Section 2.5(c)(ii) would not be satisfied; provided; however, that if any such
breach is curable by Purchaser through the exercise of Purchaser’s reasonable
best efforts and for so long as Purchaser shall be using its reasonable best
efforts to cure such breach, Caraustar and Sellers may not terminate this
Agreement pursuant to this Section 2.7(d).

 

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(e) If this Agreement is terminated pursuant to this Section 2.7, all
obligations of the parties under this Agreement (other than under this
Section 2.7 or under Section 5.5 and Articles 6 and 7) shall be terminated
without any liability or penalty on the part of any party or its shareholders,
members, officers, directors, employees or agents to any other party; provided,
however, that no such termination shall relieve any party from liability for
damages resulting from any breach by such party of this Agreement or otherwise
limit any remedy available to any party on account of such breach.

ARTICLE 3

Representations and Warranties of Caraustar and Sellers

Caraustar and Sellers hereby jointly and severally represent and warrant to
Purchasers, as of the date of this Agreement and the Closing Date, as follows:

3.1 Title. Gypsum is the sole record and beneficial owner of the GP Interest,
which is the sole interest in the Partnership owned by Gypsum, free and clear of
any Lien other than a Permitted Restriction, and has full power and authority to
sell, transfer, convey, deliver and assign the GP Interest, free and clear of
any Lien other than a Permitted Restriction and (as of the date of this
Agreement) other than restrictions on the sale and transfer thereof under
Caraustar’s senior credit agreement, which restrictions shall be waived or
otherwise eliminated on or prior to the Closing Date. The GP Interest
constitutes Gypsum’s entire right and interest in the Partnership. MGC is the
sole record and beneficial owner of the LP Interest, which is the sole interest
in the Partnership owned by MGC, free and clear of any Lien other than a
Permitted Restriction, and has full power and authority to sell, transfer,
convey, deliver and assign the LP Interest, free and clear of any Lien other
than a Permitted Restriction and (as of the date of this Agreement) other than
restrictions on the sale and transfer thereof under Caraustar’s senior credit
agreement which restrictions shall be waived or otherwise eliminated on or prior
to the Closing Date. The LP Interest constitutes MGC’s entire right and interest
in the Partnership.

3.2 Organization and Status. Caraustar is a corporation, duly incorporated and
organized, validly existing and in good standing under the laws of the State of
North Carolina and has the corporate power and authority to own and operate its
assets, properties and business and to otherwise conduct its business as
presently conducted. Gypsum is a corporation, duly incorporated and organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own and operate its assets,
properties and business and to otherwise conduct its business as presently
conducted. MGC is a limited liability company, duly formed and organized,
validly existing and in good standing under the laws of the State of Delaware
and has the power and authority to own and operate its assets, properties and
business and to otherwise conduct its business as presently conducted.

3.3 Authority. Each of Caraustar and the Sellers has the full legal right and
power and all authority required to enter into, execute and deliver this
Agreement and any Ancillary Instrument to

 

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which it is a party and to perform its obligations under this Agreement and such
Ancillary Instruments. The execution and delivery of this Agreement and the
Ancillary Instruments to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of Caraustar and Sellers in compliance with any
governing or applicable agreements, instruments or other documents. This
Agreement and the Ancillary Instruments to which it is a party have been duly
executed and delivered by each of Caraustar and Sellers and constitute the
legal, valid and binding obligations of Caraustar and Sellers enforceable
against Caraustar and Sellers in accordance with their respective terms, except
as limited by: (i) applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally
from time to time in effect; and (ii) the availability of equitable remedies
(regardless of whether enforceability is considered in a proceeding at law or in
equity).

3.4 No Consents or Approvals; Absence of Conflicts. Except as may be required
under the terms of the Partnership Agreement, the execution and delivery of this
Agreement and the Ancillary Instruments to which it is a party, the consummation
of the transactions contemplated hereby and thereby and the performance by each
of Caraustar and Sellers of this Agreement and such Ancillary Instruments in
accordance with their respective terms and conditions will not: (i) except for
disclosures required to be made under the applicable rules and regulations of
the Securities and Exchange Commission or the rules of any securities exchange
or NASDAQ, require any notice to, filing or registration with, or permit,
license, variance, waiver, exemption, franchise, order, consent, authorization
or approval of, any Governmental Authority or any other person; (ii) assuming
that the consent(s) referenced in Section 2.5(c)(iv) have been obtained,
violate, conflict with or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in the creation of any Lien on the
Partnership Interest held by Seller or upon the assets, properties or business
of the Partnership under any of the terms, conditions and provisions of any
contract or other agreement to which Caraustar or any Seller is a party or to
which Caraustar or any Seller or any Partnership Interest held by Seller are
bound or subject, other than such violations, conflicts or breaches as would
not, individually or in the aggregate, have a Partnership Material Adverse
Effect, or result in the creation of any Lien on the Partnership Interest held
by Seller or upon the assets, properties or business of the Partnership
(iii) violate any judgment, ruling, order, writ, injunction, award, decree,
statute, law, ordinance, code, rule or regulation of any Governmental Authority
that is applicable to Caraustar or any Seller or to the Partnership Interest
held by any Seller, other than such violations as would not, individually or in
the aggregate, have a Partnership Material Adverse Effect or have a Material
Adverse Effect on Caraustar and the Sellers, taken as a whole, or (iv) violate
the certificate/articles of incorporation, certificate/articles of formation,
bylaws or limited liability company agreement of Caraustar or any Seller or the
Partnership Agreement.

3.5 Litigation. Neither Caraustar nor any Seller is a party to, or to
Caraustar’s or any Seller’s knowledge, threatened with, any litigation or
judicial, governmental, regulatory, administrative or arbitration suit, action,
claim, proceeding or investigation which, if decided adversely, could reasonably
be expected to have a material adverse effect on the Partnership Interests or
the transactions contemplated hereby.

 

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3.6 Brokers’ or Finders’ Fees, Etc. Other than UBS Securities LLC, the fees and
expenses of which will be paid by Caraustar, no broker, finder, agent or similar
intermediary has acted for or on behalf of Caraustar or any Seller in connection
with this Agreement or the transactions contemplated hereby, and no broker,
finder, agent or similar intermediary is entitled to any broker’s, finder’s or
similar fee or other commission in connection therewith based on any contract or
other agreement with Caraustar or any Seller or any action taken by Caraustar or
any Seller.

ARTICLE 4

Representations and Warranties of Purchasers

Purchasers hereby jointly and severally represent and warrant to Caraustar and
Sellers, as of the date of this Agreement and the Closing Date, as follows:

4.1 Organization and Status. TIN is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the corporate power and authority necessary to own and operate
its assets, properties and business and to otherwise conduct its business as
presently conducted. TGC is a corporation duly incorporated and organized,
validly existing and in good standing under the laws of the State of Nevada, and
has the corporate power and authority necessary to own and operate its assets,
properties and business and to otherwise conduct its business as presently
conducted.

4.2 Authority. Each Purchaser has the full legal right and power and all
authority required to enter into, execute and deliver this Agreement and the
Ancillary Instruments to which it is a party and to perform such Purchaser’s
obligations under this Agreement and such Ancillary Instruments. The execution
and delivery of this Agreement and the Ancillary Instruments to which it is a
party and the consummation by each Purchaser of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part
of such Purchaser in compliance with any governing or applicable agreements,
instruments or other documents. This Agreement and the Ancillary Instruments to
which it is a party have been duly executed and delivered by each Purchaser and
constitute the legal, valid and binding obligations of each Purchaser,
enforceable against such Purchaser in accordance with their respective terms,
except as limited by: (i) applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally from time to time in effect; and (ii) the availability of equitable
remedies (regardless of whether enforceability is considered in a proceeding at
law or in equity).

4.3 No Consents or Approvals; Absence of Conflicts. Except as may be required
under the terms of the Partnership Agreement, the execution and delivery of this
Agreement and the Ancillary Instruments to which it is a party, the consummation
of the transactions contemplated hereby and thereby and the performance by each
Purchaser of this Agreement and such Ancillary Instruments in accordance with
their respective terms and conditions will not: (i) except for disclosures
required to be made under the applicable rules and regulations of the Securities
and Exchange commission or the rules of any securities exchange or NASDAQ,
require any notice to, filing or registration with, or permit, license,
variance, waiver, exemption, franchise, order, consent, authorization or
approval of, any Governmental Authority or any other person; (ii) assuming that
the consents referenced in Section 2.5(b)(v) have been obtained, violate,
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or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien on
any of the assets, properties or businesses of any Purchaser under any of the
terms, conditions or provisions of any contract or other agreement to which any
Purchaser is a party or to which any assets, properties or businesses of any
Purchaser are bound or subject, other than such violations, conflicts or
breaches as would not, individually or in the aggregate, have a Partnership
Material Adverse Effect (iii) violate any judgment, ruling, order, writ,
injunction, award, decree, statute, law, ordinance, code, rule or regulation of
any Governmental Authority that is applicable to either Purchaser or any of its
assets, properties or businesses, other than such violations as would not,
individually or in the aggregate, have a Partnership Material Adverse Effect or
have a material adverse effect on any Purchaser, or (iv) violate the certificate
of incorporation or bylaws of either Purchaser or the Partnership Agreement.

4.4 Brokers’ or Finders’ Fees, Etc. No broker, finder, agent or similar
intermediary has acted for or on behalf of either Purchaser in connection with
this Agreement or the transactions contemplated hereby, and no broker, finder,
agent or similar intermediary is entitled to any broker’s, finder’s or similar
fee or other commission in connection therewith based on any contract or other
agreement with either Purchaser or any action taken by either Purchaser.

4.5 Purchase for Investment. Purchasers acknowledge that the sale of the
Partnership Interests purchased by them has not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or under any state
securities laws. Each Purchaser is purchasing the Partnership Interest from its
respective Seller solely for investment for its own account and not with a view
to, or in connection with, any distribution or sale thereof to any Person (other
than an Affiliate), and neither Purchaser will sell or otherwise dispose of the
Partnership Interest purchased by it except in compliance with the registration
requirements or exemption provisions under the Securities Act and the rules and
regulations promulgated thereunder, and any other applicable securities laws.

4.6 Litigation. As of the date hereof, neither Purchaser is a party to, or to
Purchaser’s knowledge, threatened with, any litigation or judicial,
governmental, regulatory, administrative or arbitration suit, action, claim,
proceeding or investigation which, if decided adversely, could reasonably be
expected to have a Partnership Material Adverse Effect or an adverse effect on
the transactions contemplated hereby.

ARTICLE 5

Additional Covenants

5.1 Commercially Reasonable Efforts. Each of the parties hereto agrees to use
its commercially reasonable efforts to take or cause to be taken all action, to
do or cause to be done, and to assist and cooperate with the other in doing, all
things necessary, proper or advisable or ensure that the conditions to the other
party’s obligations hereunder are satisfied, insofar as such matters are within
the control of such party, in the most expeditious manner practicable,
including, but not limited to, (i) the obtaining of all necessary waivers,
consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings (including, but not limited to,

 

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filings with Governmental Authorities, if any) and the taking of all reasonable
steps as may be necessary to obtain any approval or waiver from, or to avoid any
action or proceeding by, any Governmental Authority, (ii) the obtaining of all
necessary consents, approvals or waivers from third Persons, and (iii) the
execution and delivery of any and all agreements, documents and instruments as
are necessary and appropriate in order to effectuate and carry out the
provisions of this Agreement and the Ancillary Instruments to which it is a
party and the consummation of the transactions contemplated hereby and thereby.

5.2 Partnership Distributions. Prior to December 31, 2005, TIN and Gypsum, in
their capacities as the general partners of the Partnership, shall each cause
its representatives serving on the Management Committee of the Partnership to
consent to and authorize, contingent upon Closing, a distribution to the Sellers
equal to the following: (i) 50% of the amount shown as “net income” on the
audited statement of operations of the Partnership for the year ending
December 31, 2005, minus (ii) any prior cash distributions made to Sellers for
the fiscal year ending December 31, 2005 (or any portion thereof) in their
capacities as partners of the Partnership (such amount as determined by the
formula described in (i)-(ii) of this Section 5.2 collectively, the “Closing
Distribution”). Sellers and Purchasers acknowledge and agree that (x) a
distribution of $2.5 million has been made to Sellers as of December 30, 2005,
and that such distribution shall be subtracted as provided in (ii) above for
purposes of determining the Closing Distribution and (y) if the Closing occurs
and the Closing Distribution is made pursuant to this Section 5.2, such Closing
Distribution will be in full and complete satisfaction of Sellers’ right to
receive any “net free cash flow” for the period ending December 31, 2005.
Notwithstanding anything else in this Agreement or the Partnership Agreement to
the contrary, Purchasers and Sellers agree that if the Closing occurs prior to
January 31, 2006, Sellers shall not be entitled to any distribution of net free
cash flow or any allocation of profits, gains, losses, credits and other items
realized or recognized by the Partnership for any period commencing on or after
January 1, 2006. Purchasers shall, on the later to occur of: (i) the Closing
Date or (ii) one (1) Business Day following the issuance by Deloitte & Touche
LLP of its audit report on the Partnership’s financial statements for the year
ending December 31, 2005, pay the Closing Distribution by wire transfer of
immediately available funds to the account or accounts specified by Sellers
pursuant to Section 2.6(a)(i) or any other account or accounts subsequently
designated by Sellers no later than one (1) Business Day prior to the date that
such payment is due.

5.3 Consent. Each of the parties acknowledges and agrees that the purchase and
sale of the Partnership Interests contemplated by this Agreement are not being
made pursuant to the terms of the Partnership Agreement and consents to the
purchase and sale of the Partnership Interests pursuant to this Agreement
notwithstanding any provision to the contrary contained in the Partnership
Agreement.

5.4 Certain Tax Matters.

(a) Tax Returns. The parties acknowledge and agree that TIN shall (i) deliver or
cause to be delivered a Schedule K-l for the taxable year of the Partnership
ending on December 31, 2005 to Seller as soon as practicable after the Closing
Date, but not later than one hundred eighty (180) days after the Closing Date,
(ii) deliver or cause to be delivered a Schedule K-l for the taxable year
(including, if applicable, any short taxable year) of the

 

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Partnership subsequent to the year ending on December 31, 2005 to Seller as soon
as practicable after the end of such taxable year, but not later than one
hundred eighty (180) days after the end of such taxable year, and (iii) prepare
and timely file, or cause to be prepared and timely filed, a federal information
tax return and any required similar state tax returns for the Partnership for
the taxable year of the Partnership ending on December 31, 2005, and that upon
the request of any Seller, TIN shall furnish to Caraustar a copy of the proposed
form of any such federal or state information tax return of the Partnership not
less than ten (10) Business Days before the final version of such return is to
be filed, and will furnish to each Seller such information concerning the
Partnership’s tax matters for periods ending on or prior to December 31, 2005 as
such Seller may reasonably request.

(b) Section 754 Election. Caraustar and Sellers agree and consent to the
Partnership making the election provided in Code section 754 effective for any
or all of the returns described in Section 5.4(a) above, as TIN, in its sole
discretion, may determine.

5.5 Confidentiality; Public Announcements. The parties agree that the terms and
conditions of the transactions contemplated in this Agreement are to remain
confidential, except that a party and its Affiliates may disclose the terms and
provisions of this Agreement (i) to the extent that any party or any of its
Affiliates is required by applicable law or by the rules of any securities
exchange to make public disclosure or (ii) in any legal proceeding, including
any audit, to the extent necessary to enforce any rights under this Agreement,
in either case, the disclosing party shall provide the other party with prior
notice of such disclosure and the content thereof. Notwithstanding the
foregoing, following the Closing, a party may issue a press release or make
other public announcements disclosing that the transactions contemplated by this
Agreement have been consummated, but shall not disclose any other terms of the
transactions, except to the extent required by applicable law or by the rules of
any securities exchange. Each party shall provide the other party with the
reasonable opportunity to review any press release concerning the transactions
contemplated by this Agreement prior to dissemination of such press release. Any
announcement or notice to the employees of the Partnership shall be jointly
planned and coordinated by Purchasers and Sellers.

5.6 Caraustar Letter of Credit. On or prior to the second Business Day following
the Closing, Purchasers shall payoff, or shall cause the Partnership to payoff,
all amounts owed by the Partnership pursuant to that certain Loan Agreement
dated as of September 22, 2005, by and among the Partnership and Toronto
Dominion (Texas), LLC, as lender and administrative agent (the “Loan
Agreement”). Purchasers shall use their reasonable commercial efforts to assist
Caraustar in obtaining the release and cancellation of that certain letter of
credit delivered by Caraustar for the benefit of the lenders under the Loan
Agreement.

5.7 Surviving Contractual Indemnity. Subject to the limitations set forth in
Section 5.8 hereof, Caraustar shall indemnify, defend and hold TIN harmless from
and against the matters identified in Section 13.1(d)(i) and Section 13(d)(v) of
the Formation Agreement. Purchasers confirm and agree that, except as expressly
provided herein, any and all other obligations of Caraustar in Section 13.1 of
the Formation Agreement shall be null and void as of the Closing and forever
thereafter.

 

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5.8 Limitation of Surviving Contractual Indemnity.

(a) as used in this Section 5.8, the following terms shall have the following
meanings:

(i) “Claim” means a claim for indemnification under Section 5.7. A series of
claims arising out of or relating to the same act, omission, event, condition or
circumstance is a single “Claim”.

(ii) “Claim Threshold” means $50,000.00.

(b) No indemnification shall be made under Section 5.7 unless the Claim exceeds
the Claim Threshold. If a Claim exceeds the Claim Threshold, Caraustar shall,
subject to the other limitations set forth in this Section 5.8, pay the Claim in
its entirety without regard to the Claim Threshold.

(c) Caraustar’s total liability for all Claims under Section 5.8 shall in no
event exceed five million dollars USD ($5,000,000.00).

(d) Caraustar shall have no obligation to make indemnification with respect to
Claims made under Section 5.7 unless TIN shall have asserted the Claim within
five (5) years after the Closing Date (as defined in Section 2.4 of this
Agreement).

(e) Each of Caraustar and TIN shall promptly notify the other if such party
receives notice of any order, demand, claim or facts which could reasonably be
expected to lead to a Claim. Upon such notification, Caraustar shall have the
right to reasonably determine the appropriate actions to be taken and to prepare
and implement the necessary response action plan through its internal
environmental and legal personnel or qualified external environmental consulting
and contracting firms selected, engaged and directed by Caraustar. Caraustar
shall also have the right, at its own expense, to pursue administrative appeals
or litigation in order to avoid or mitigate a potential Claim. Caraustar shall
consult with TIN prior to making each determination, and shall promptly advise
TIN on each determination when made. In no event shall Caraustar make such
determination involving a material change in plant operations without first
receiving the approval of TIN, which approval shall not be unreasonably withheld
or delayed. In no event shall TIN cause or obligate Caraustar to undertake any
response work without Caraustar’s prior written consent, which shall not be
unreasonably withheld or delayed. Caraustar shall have the sole right to obtain
reimbursement or payment from any insurance policy, governmental fund,
responsible party or other source available for payment of costs related to its
indemnification obligations under Section 5.7. TIN will cooperate with any
response work conducted by Caraustar, including the placement of engineering or
institutional controls to the extent such controls do not materially affect the
industrial use of the real property or the operational costs of the facility, as
well as any efforts to obtain reimbursement or payment, upon request by
Caraustar. Upon advanced reasonable notice to TIN by Caraustar, TIN agrees that
Caraustar shall have full access to the subject facilities to undertake response
work related to its indemnification obligations under Section 5.7 and shall have
sole control over such work. Caraustar shall

 

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keep TIN timely informed as to the progress of the response work, and shall do
all that is reasonably possible to avoid disruption of facility operations when
undertaking response actions. In no event shall Caraustar’s indemnity obligation
as set forth in Section 5.7 be deemed to cover any change in Environmental Law
(as defined in the Formation Agreement) after the Closing Date (as defined in
the Formation Agreement), nor shall the limitations in Section 5.8 affect any
other indemnity obligations of Caraustar or Sellers under this Agreement.

ARTICLE 6

Survival of Representations and Warranties; Indemnification

6.1 Survival of Representations and Warranties. All representations, warranties,
covenants and agreements made by any party hereunder shall survive the Closing.

6.2 Obligation of Caraustar and Sellers to Indemnify. Caraustar and Sellers,
jointly and severally, shall indemnify, defend and hold harmless Purchasers and
their successors and assigns, from and against any loss or damage resulting in
an actual expenditure by Purchasers, the Partnership or any of their Affiliates,
or any of their successors or assigns, and any cost or expense, including
reasonable attorneys’ fees and expenses actually paid, suffered, sustained,
incurred or required to be paid by Purchasers, the Partnership or any of their
Affiliates, or any of their successors and assigns, based upon, arising out of
or otherwise with respect to a breach or inaccuracy of any representation or
warranty made by Caraustar or any Seller hereunder, or any failure of Caraustar
or any Seller to perform or comply with any covenant or agreement contained
herein or in any Ancillary Instrument to which it is a party.

6.3 Obligation of Purchasers to Indemnify. Purchasers, jointly and severally,
shall indemnify, defend and hold harmless Caraustar and Sellers and their
successors and assigns, from and against any loss or damage resulting in an
actual expenditure by Caraustar, Sellers, their Affiliates or any of their
successors and assigns, and any cost or expense, including reasonable attorneys’
fees and expenses actually paid, suffered, sustained, incurred or required to be
paid by Caraustar, Sellers, their Affiliates or any of their successors and
assigns, based upon, arising out of or otherwise with respect to a breach or
inaccuracy of any representation or warranty made by Purchaser hereunder, or any
failure of Purchaser to perform or comply with any covenant or agreement
contained herein or in any Ancillary Instrument to which it is a party.

6.4 Procedure for Indemnification – Third Party.

(a) If any Person entitled to indemnification pursuant to this Article 6 (an
“Indemnified Person”) receives notice of any third party claim by a Person not
affiliated with a party to this Agreement or the commencement of any suit,
action, proceeding or investigation by such a Person with respect to which any
other person (or persons) is obligated to provide indemnification (an
“Indemnifying Person”) pursuant to this Article 6, the Indemnified Person shall
promptly give the Indemnifying Person written notice thereof (an
“Indemnification Notice”), but the failure to give an Indemnification Notice to
the Indemnifying Person shall not relieve the Indemnifying Person of any
liability that it may

 

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have to an Indemnified Person, except to the extent that the Indemnifying Person
shall have been actually prejudiced in its ability to defend the suit, action,
claim, proceeding or investigation for which such indemnification is sought by
reason of such failure.

(b) Upon receipt of an Indemnification Notice, the Indemnifying Person shall be
entitled at its option and at its cost and expense to assume the defense of such
suit, action, claim, proceeding or investigation with respect to which it is
called upon to indemnify an Indemnified Person pursuant to this Article 6;
provided, however, that, notice of the Indemnifying Person’s intention to assume
such defense shall be given by the Indemnifying Person to the Indemnified Person
within fifteen (15) days after the Indemnified Person gives the Indemnifying
Person an Indemnification Notice. In the event that the Indemnifying Person
elects to assume the defense of such suit, action, claim, proceeding or
investigation, as the case may be, the Indemnifying Person shall promptly retain
counsel reasonably satisfactory to the Indemnified Person. The Indemnified
Person shall have the right to employ its own counsel in any such suit, action,
claim, proceeding or investigation, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Person unless: (i) the employment of
such counsel shall have been authorized by the Indemnifying Person; (ii) the
Indemnifying Person shall not have promptly retained counsel reasonably
satisfactory to the Indemnified Person to take charge of the defense of such
suit, action, claim, proceeding or investigation; or (iii) the Indemnified
Person shall have reasonably concluded that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Indemnifying Person if the Indemnifying Person is also a
defendant in such claim, suit, action, proceeding or investigation, in which
event, such fees and expenses (including, without limitation, any fees paid to
witnesses) shall be borne by the Indemnifying Person. In the event of (i),
(ii) or (iii) above, the Indemnifying Person shall not have the right to direct
the defense of any suit, action, claim, proceeding or investigation on behalf of
the Indemnified Person, but may participate therein. Notwithstanding the
foregoing, if any Indemnified Person reasonably determines in good faith that
there is a reasonable probability that an action may materially and adversely
affect it or its subsidiaries or Affiliates other than as a result of monetary
damages for which it would be entitled to indemnification from the Indemnifying
Person under this Agreement, such Indemnified Person may, by written notice to
the Indemnifying Person, assume the exclusive right to defend, compromise or
settle such action, but the Indemnifying Person shall not be bound by any
determination of an action so defended or any compromise or settlement thereof
effected without its consent (which shall not be unreasonably withheld or
unreasonably delayed).

(c) If the Indemnifying Person fails to give written notice to the Indemnified
Person of its election to assume the defense of any suit, action, claim,
proceeding or investigation for which it is called upon to indemnify an
Indemnified Person pursuant to this Article 6 within fifteen (15) days after the
Indemnified Person gives the Indemnification Notice to the Indemnifying Person,
the Indemnifying Person shall be bound by any determination made in such suit,
action, claim, proceeding or investigation or compromise or settlement thereof
effected by the Indemnified Person.

 

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6.5 Procedure for Indemnification – Direct Claims. If an Indemnified Person
shall claim indemnification hereunder for any claim other than third-party
claims described in Section 6.4, the Indemnified Person shall notify the
Indemnifying Person in writing of the basis for such claim and such notice shall
set forth the nature and amount of alleged damages resulting from such claim in
reasonable detail. The Indemnifying Person shall give written notice of any
disagreement with such claim within thirty (30) days following receipt of the
Indemnified Person’s notice of the claim, and such notice shall specify the
nature and extent of such disagreement in reasonable detail. If the Indemnifying
Person and the Indemnified Person are unable to resolve any disagreement within
thirty (30) days following receipt by the Indemnified Person of the notice
referred to in the preceding sentence, then the parties hereto agree, subject to
this Section 6.5, to arbitrate any such claim as set forth in Section 7.6.

6.6 Covered Persons. The obligations of Caraustar and Sellers under this Article
6 shall extend, upon the same terms and conditions, to each person, if any, who
controls Purchasers, the Partnership or any of their Affiliates and each of
their respective successors or assigns, within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended,
and to officers, directors, shareholders, members, partners, employees,
consultants and agents of Purchasers, the Partnership or any of their
Affiliates, and each of their respective successors or assigns, and their
controlling persons. The obligations of Purchasers under this Article 6 shall
extend, upon the same terms and conditions, to each person, if any, who controls
Caraustar, Sellers, any of their Affiliates and each of their respective
successors or assigns, within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended, and to officers,
directors, shareholders, members, partners, employees, consultants and agents of
Caraustar, Sellers, any of their Affiliates and each of their respective
successors or assigns, and their controlling persons.

6.7 Exclusive Remedy. If the Closing occurs, the remedies provided in this
Article 6 constitute the sole and exclusive remedies for recoveries against
another party for breaches of the representations, warranties, covenants and
agreements in this Agreement and for the matters specifically listed in this
Article 6 as being indemnified against; provided, however, that neither the
foregoing nor anything else in this Agreement will limit the right of a party to
enforce the performance of this Agreement by any remedy available to it in
equity, including specific performance, or to any remedy whatsoever with respect
to the Nondisclosure Agreement or the Supply Agreement. Notwithstanding the
foregoing limitation, nothing in this Section 6.7 shall be construed or
interpreted to apply to any cost, damage, expense or loss with respect to, as a
result of or involving (i) any breach of a representation, warranty, covenant or
agreement in this Agreement, whether by act or omission, intended to mislead the
party relying on it or (ii) fraud.

ARTICLE 7

Miscellaneous

7.1 Fees and Expenses. Whether or not the transactions contemplated hereby are
consummated, each Purchaser, on the one hand, and each of Caraustar and Sellers
on the other hand,

 

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shall each pay its own fees and expenses incident to the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby, including attorneys’, accountants’ and other
advisors’ fees and the fees and expenses of any broker, finder or agent retained
by such party in connection with the transaction contemplated hereby.

7.2 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally or sent by
overnight courier service (with all fees prepaid) or facsimile transmission, to
the parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice as follows:

 

  (i) If to Purchasers:

c/o Temple-Inland Inc.

303 South Temple Drive

Diboll, Texas 75941

Telefax: 936.829.1248

Attention: Jack C. Sweeny

Executive Vice President-Forest Products

with a copy to:

c/o Temple-Inland Inc.

1300 S. Mopac Expressway

Austin, Texas 78746

Telefax: 512.434.8051

Attention: George S. Vorpahl

and

Sutherland Asbill & Brennan LLP

999 Peachtree Street, NE, Suite 2300

Atlanta, Georgia 30309

Telefax: 404.853.8806

Attention: Thomas C. Herman

 

  (ii) If to Caraustar or any Seller:

c/o Caraustar Industries, Inc.

5000 Austell-Powder Springs Road, Suite 300

Austell, Georgia 30106

Telefax: 770.732.3433

Attention: Michael J. Keough

 

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with a copy to:

Caraustar Industries, Inc.

Legal Department

5000 Austell – Powder Springs Road, Suite 300

Austell, Georgia 30106

Telefax: 770.745.3719

Attention: Wilma Beaty

Robinson, Bradshaw & Hinson, P.A.

101 North Tryon Street, Suite 1900

Charlotte, North Carolina 28246

Telefax: 704.378.4000

Attention: Robert G. Griffin

Any such notice, request, demand or other communication shall be deemed to be
given if delivered in person, on the date delivered, if made by facsimile
transmission, on the date transmitted (as evidenced by electronic confirmation),
or, if sent by overnight courier service, on the date delivered as evidenced by
the date of the bill of lading. Any party sending a notice, request, demand or
other communication by facsimile transmission shall also send a hard copy of
such notice, request, demand or other communication by one of the other means of
providing notice set forth in this Section 7.2. Any notice, request, demand or
other communication shall be given to such other representative or at such other
address as a party to this Agreement may furnish to the other parties in writing
pursuant to this Section 7.2.

7.3 Entire Agreement. This Agreement and any exhibits and schedules hereto
contain the entire agreement between the parties with respect to the purchase of
the Partnership Interests and related transactions and supersede all prior
contracts and other agreements, written or oral, with respect thereto.

7.4 Waivers and Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity. The rights and
remedies of any party arising out of or otherwise in respect of any inaccuracy
in or breach of any representation or warranty, or any failure to perform or
comply with any covenant or agreement, contained in this Agreement shall in no
way be limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy, breach or failure is based
may also be the subject matter of any other representation, warranty, covenant
or agreement contained in this Agreement (or in any other agreement between the
parties) as to which there is no inaccuracy, breach or failure.

 

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7.5 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with the internal laws of the State of Delaware without
regard to its conflicts of law principles.

7.6 Dispute Resolution. All claims or disputes arising between the parties
relating to this Agreement or the breach thereof, including claims unresolved
pursuant to Section 6.5, shall be resolved by final and binding arbitration
instituted and conducted pursuant to the Commercial Arbitration Rules of the
American Arbitration Association (the “AAA Rules”), except to the extent such
rules are modified or altered by this Section 7.6. All arbitration hearings of
claims shall be conducted in Houston, Texas. The arbitrator(s) shall have the
authority to award interest on any damages and to award attorneys fees and costs
to the prevailing party or parties, if any, or to allocate such fees and costs
as the arbitrator(s) shall determine to be equitable. A judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction.
The agreement to arbitrate set forth in this Section 7.6 may only be enforced by
the parties to this Agreement and their permitted successors and assigns, shall
survive the termination or breach of this Agreement, and shall be construed
pursuant to and governed by the provisions of the Federal Arbitration Act, 9
U.S.C. §l, et seq.

7.7 Binding Effect; Benefit. This Agreement shall inure to the benefit of, and
be binding upon the parties hereto and their respective successors and assigns.
Nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than the parties hereto or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.

7.8 No Assignment. This Agreement is not assignable except by operation of law;
provided, however, that either Purchaser may assign this Agreement to an
Affiliate (but any such assignment shall not release the assigning Purchaser
from its obligations under this Agreement).

7.9 Counterparts. This Agreement may be executed in any number of counterparts
and by the parties in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

7.10 Severability. If any provision of this Agreement, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall
not in any way be impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.

[Signatures on following page]

 

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

 

TIN INC. By:  

/s/ Jack C. Sweeny

 

Jack C. Sweeny

Executive Vice President

TEMPLE GYPSUM COMPANY By:  

/s/ Andrew D. Harris

 

Andrew D. Harris

President

GYPSUM MGC, INC. By:  

/s/ Ronald J. Domanico

Name:   Ronald J. Domanico Title:   Vice President, Secretary and Treasurer
MCQUEENY GYPSUM COMPANY, LLC By: McQueeney Gypsum Company, its sole member By:  

/s/ Ronald J. Domanico

Name:   Ronald J. Domanico Title:   Vice President, Secretary and Treasurer
CARAUSTAR INDUSTRIES, INC. By:  

/s/ Michael J. Keough

Name:   Michael J. Keough Title:   President and CEO

Signature page to Partnership Interests Purchase Agreement

 

*    *    *

 

The following Exhibits to the Agreement for Purchase and Sale of Partnership
Interests in Standard Gypsum, L.P., dated as of January 17, 2006 are omitted,
and the Company will furnish supplementally any such omitted Exhibit to the
Commission upon request.

Exhibit A – Supply Agreement

Exhibit B – Nondisclosure Agreement

Exhibit C – Mutual Release