<PAGE>
                                                                   EXHIBIT 10.07


                                                                  EXECUTION COPY


                      FOURTH AMENDMENT TO CREDIT AGREEMENT

        This Fourth Amendment to Credit Agreement (this "Amendment") is entered
into as of September 23, 2002 among (i) CARAUSTAR INDUSTRIES, INC. (the
"Borrower"), (ii) the subsidiaries of the Borrower identified as Guarantors on
the signature pages hereto, (iii) the Lenders identified on the signature pages
hereto and (iv) BANK OF AMERICA, N.A., as Administrative Agent (the
"Administrative Agent"). All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Credit Agreement
referred to below.

                                    RECITALS

        A.     A Credit Agreement dated as of March 29, 2001 (as amended by that
certain First Amendment to Credit Agreement dated as of September 10, 2001, that
certain Second Amendment to Credit Agreement dated as of November 30, 2001 and
that certain Third Amendment to Credit Agreement dated as of January 22, 2002
and as further modified or amended from time to time, the "Credit Agreement")
has been entered into by and among the Borrower, the Guarantors party thereto
(the "Guarantors"), the financial institutions party thereto (the "Lenders") and
the Administrative Agent.

        B.     The parties previously entered into that certain Fourth Amendment
to Credit Agreement dated as of June 3, 2002, as modified as of July 11, 2002
(as so modified, the "June 2002 Amendment"), which contained certain amendments
to the Credit Agreement and other agreements among the parties with respect to
the Credit Agreement.

        C.     Notwithstanding the fact that the June 2002 Amendment was
executed by the parties and deemed closed as of July 3, 2002, the June 2002
Amendment contained certain conditions to effectiveness, which conditions have
not been satisfied, and, accordingly, the June 2002 Amendment has not become
effective except to the extent provided therein.

        D.     The Borrower has requested, and the Required Lenders have agreed,
to the amendments to the Credit Agreement and other agreements as set forth in
this Amendment, and the parties intend that this Amendment shall amend, restate
and replace the June 2002 Amendment in its entirety, and the June 2002 Amendment
shall have no further force or effect.

                                    AGREEMENT

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that, as
of the Fourth Amendment Effective Date (as hereinafter defined), the June 2002
Amendment is amended, restated and replaced in its entirety as follows:

<PAGE>

        1.     Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of
the Credit Agreement is hereby amended by adding the following definitions in
appropriate alphabetical order:

        (a)    "Cash Taxes" means, for any period, the aggregate of all income
               taxes paid in cash by the Borrower and its Consolidated
               Subsidiaries during such period (irrespective of when such taxes
               were accrued or assessed), as determined and computed on a
               Consolidated basis in accordance with GAAP.

        (b)    "Collateral" means all the accounts receivable and inventory of
               the Credit Parties, now existing or hereafter acquired and with
               respect to which Liens in favor of the Administrative Agent are
               purported to be granted, pursuant to and in accordance with the
               terms of the Collateral Documents.

        (c)    "Collateral Documents" means a collective reference to the
               Security Agreement and all financing statements and/or other
               documents reasonably requested by the Administrative Agent to
               create and/or perfect its security interest, for the benefit of
               the secured parties referred to therein, in the Collateral of the
               Credit Parties.

        (d)    "Dividends" has the meaning given to such term in the definition
               of "Restricted Payment" contained herein.

        (e)    "Fixed Charge Coverage Ratio" means, as of the last day of any
               fiscal quarter, the ratio of (a) the remainder of EBITDA minus
               Capital Expenditures to (b) the sum of (i) Interest Expense plus
               (ii) Cash Taxes plus (iii) Dividends plus (iv) Scheduled Debt
               Payments, in each case for the period of four (4) consecutive
               fiscal quarters ending as of such day.

        (f)    "Fourth Amendment" means that certain Fourth Amendment to Credit
               Agreement dated as of September 23, 2002 among the Borrower, the
               Guarantors, the Lenders party thereto and the Administrative
               Agent.

        (g)    "Fourth Amendment Effective Date" means September 23, 2002.

        (h)    [Intentionally Omitted]

        (i)    "JS Industrial Packaging Group Acquisition" means the Borrower's
               acquisition from Jefferson Smurfit Corporation of the business
               referred to as the "JS Industrial Packaging Group" for an
               aggregate consideration (including any assumed Debt) of
               approximately $90 million (plus approximately $5 million of
               transaction costs).

        (j)    "New Senior Subordinated Note Indenture" means the Indenture, to
               be dated on or about the issue date of the New Senior
               Subordinated Notes, between the Borrower, the Subsidiaries of the
               Borrower identified as guarantors therein and


                                       2
<PAGE>

               The Bank of New York, as Trustee, as amended, modified and
               supplemented from time to time to the extent permitted under this
               Agreement.

        (k)    "New Senior Subordinated Notes" means the Senior Subordinated
               Notes issued pursuant to the New Senior Subordinated Note
               Indenture, as amended, modified and supplemented from time to
               time to the extent permitted under this Agreement.

        (l)    "Security Agreement" means that certain Security Agreement,
               substantially in the form of Exhibit I hereto, to be dated as of
               the Fourth Amendment Effective Date among the Credit Parties and
               the Administrative Agent, pursuant to which Liens in favor of the
               Administrative Agent, in its capacity as Collateral Agent, for
               the ratable benefit of (i) the Administrative Agent and the
               Lenders (and, with respect to Obligations under Hedging
               Agreements, Affiliates of the Lenders as well as the Lenders),
               (ii) the lenders under the Premier Boxboard Credit Facility and
               (iii) the lenders under the Standard Gypsum Credit Facility, are
               purported to be granted, as such Security Agreement is amended,
               modified, restated or supplemented from time to time.

        (m)    "Scheduled Debt Payments" means, as of any date for the Borrower
               and its Consolidated Subsidiaries, the sum of all payments of
               principal on Debt for borrowed money which, at the time of
               issuance thereof, had an original maturity of more than one year
               from the date of issuance, that are (x) required to be paid and
               (y) either actually paid or required to be paid and as to which a
               default in the payment thereof has occurred and is continuing, in
               each case under (x) and (y) for the applicable period ending on
               the date of determination (including the principal component of
               payments due on Capital Leases during such period), as determined
               and computed on a Consolidated basis in accordance with GAAP.

        (n)    "Standard Gypsum Credit Facility" means, collectively, (i) the
               Reimbursement Agreement dated as of May 1, 1999 and (ii) the
               Reimbursement Agreement dated as of August 1, 1999, each between
               Standard Gypsum, the issuing bank party thereto, and Toronto
               Dominion (Texas), Inc., as administrative agent.

        2.     Further Amendment to Section 1.1 of the Credit Agreement.

        (a)    The definition of "Applicable Percentage" in Section 1.1 of the
Credit Agreement is hereby amended by replacing the pricing grid found therein
with the following:


                                       3
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                   Applicable        Applicable        Applicable      Applicable
                                 Percentage for    Percentage for    Percentage for    Percentage
  Pricing         Total          Offshore Rate       Base Rate         Commitment         for
   Level      Leverage Ratio         Loans             Loans              Fee           L/C Fee
-------------------------------------------------------------------------------------------------
<S>           <C>                <C>               <C>               <C>               <C>
     I           * 45.0%             1.75%             0.50%              0.40%          1.75%
-------------------------------------------------------------------------------------------------
     II       * 55.0% but **         2.00%             0.75%              0.50%          2.00%
                  45.0%
-------------------------------------------------------------------------------------------------
    III       * 60.0% but **         2.25%             1.00%              0.50%          2.25%
                  55.0%
-------------------------------------------------------------------------------------------------
     IV       * 65.0% but **         2.50%             1.25%              0.50%          2.50%
                  60.0%
-------------------------------------------------------------------------------------------------
     V         ** 65.0%              2.75%             1.50%              0.55%          2.75%
-------------------------------------------------------------------------------------------------
</TABLE>

*  less than

** greater than or equal to


        (b)    The definition of "Applicable Percentage" is further amended by
adding the following paragraph as the last paragraph of such definition:

        "Notwithstanding the foregoing, in the event that the Borrower (i)
consummates the JS Industrial Packaging Group Acquisition and (ii) by November
15, 2002 has not (x) issued New Senior Subordinated Notes on terms and
conditions reasonably satisfactory to the Administrative Agent, (y) received
gross proceeds from the issuance of such New Senior Subordinated Notes in an
aggregate amount of not less than $50,000,000, and (z) (I) reduced the aggregate
principal amount of the Revolving Credit Loans to $0.00, and (II) delivered to
the Administrative Agent an unaudited Consolidated balance sheet for the
Borrower that shows a balance for cash and Cash Equivalents of not less than
$50,000,000 (which balance sheet shall be certified by a Responsible Officer of
the Borrower and shall be in form and substance reasonably satisfactory to the
Administrative Agent), the Applicable Percentages set forth above shall, on
November 15, 2002 (or, if the JS Industrial Packaging Group Acquisition is
consummated on a later date, such later date) increase by 0.25% at each Pricing
Level (but excluding the Applicable Percentage for Commitment Fee), and shall
thereafter increase by an additional 0.25% as of each three month anniversary of
November 15, 2002 (or such later date, as the case may be), until the first date
(the "Pricing Restoration Date") thereafter on which both (A) the aggregate
outstanding principal amount of the Revolving Credit Loans equals $0.00 and (B)
the Borrower's unaudited Consolidated balance sheet shows a balance for cash and
Cash Equivalents of not less than $50,000,000 (which balance sheet shall be
certified by a Responsible Officer of the Borrower, shall have been delivered to
the Administrative Agent and shall be in form and substance reasonably
satisfactory to the Administrative Agent); provided, however, notwithstanding
any such increases, the maximum Applicable Percentage hereunder for (i) Offshore
Rate Loans and L/C Fees shall be 3.75%, and (ii) Base Rate Loans shall be 2.50%;
and provided further, that upon the occurrence of the Pricing Restoration Date,
any prior increase in the Applicable Percentages pursuant to this paragraph
shall cease to have effect and the Applicable Percentage for the purpose of
calculating any applicable interest rate and/or fee hereunder shall,
automatically and without the necessity of any further action on the part of any
party hereto, again be as set forth in the table above."


                                       4
<PAGE>

        3.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Debt" is hereby amended by deleting clause (g) thereof (which
reads "(g) all Support Obligations of such Person,") and replacing it with the
following:

               "(g)   all Support Obligations of such Person in respect of
        Debt,"

        4.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "EBITDA" is hereby amended by:

               (a)    inserting the following at the end of clause (b)(v)
        therein:

               "and one-time charges, fees and expenses paid or incurred by the
               Borrower in connection with the issuance of the New Senior
               Subordinated Notes and the consummation of the other transactions
               contemplated by the Fourth Amendment in an aggregate amount of up
               to $3,000,000"; and

               (b)    inserting the following immediately after the words
        "Section 9.6" in the proviso therein:

                      "(other than the JS Industrial Packaging Group
                      Acquisition)".

        5.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition for "Loan Documents" is hereby amended in its entirety by replacing
it with the following:

               "Loan Documents" means, collectively, this Agreement, the Notes,
        the L/C Applications (except that L/C Applications shall not constitute
        Loan Documents for the purposes of Section 13.11), any Guarantor Joinder
        Agreement, the Collateral Documents and each other document, instrument
        and agreement executed and delivered by any Credit Party or its
        Subsidiaries in connection with this Agreement or otherwise referred to
        herein or contemplated hereby, all as may be amended, restated or
        otherwise modified.

        6.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition for "Restricted Payment" is hereby amended in its entirety by
deleting the comma at the end of clause (i) thereof and replacing it with the
following:

               "(any such dividend or other payment or distribution, a
        "Dividend"),

        7.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Senior Subordinated Note Indenture" is hereby amended by
inserting the following at the end thereof:

               "Except as otherwise expressly provided herein or as the context
        otherwise requires, references herein to the Senior Subordinated Note
        Indenture shall also be deemed references to the New Senior Subordinated
        Note Indenture."

        8.     Further Amendment to Section 1.1 of the Credit Agreement. The
        definition of "Senior Subordinated Notes" is hereby amended by inserting
        the following at the end thereof:


                                       5
<PAGE>

               "Except as otherwise expressly provided herein or as the context
        otherwise requires, references herein to the Senior Subordinated Notes
        shall also be deemed references to the New Senior Subordinated Notes."

        9.     Further Amendment to Section 1.1 of the Credit Agreement. The
definition of "Specified Maturity Date" is hereby deleted in its entirety and
replaced with the following:

               ""Specified Maturity Date" means March 29, 2005."

        10.    Amendment to Section 8.3 of the Credit Agreement. Section 8.3 of
the Credit Agreement is hereby amended by inserting the following at the end of
the sentence found therein:

               "Within ten Business Days after the occurrence of the Fourth
        Amendment Effective Date, the Administrative Agent, in its capacity as
        Collateral Agent under the Security Agreement (for the ratable benefit
        of the Secured Parties named therein), shall be named as loss payee, as
        its interest may appear, and/or additional insured with respect to any
        such insurance providing coverage in respect of any Collateral, and each
        provider of any such insurance shall agree, by endorsement upon the
        policy or policies issued by it or by independent instruments furnished
        to the Administrative Agent, that it will give the Administrative Agent
        thirty (30) days prior written notice before any such policy or policies
        shall be altered or canceled.

               In the event there occurs any material loss, damage to or
        destruction of the Collateral of any Credit Party or any part thereof,
        such Credit Party shall promptly give written notice thereof to the
        Administrative Agent generally describing the nature and extent of such
        loss, damage or destruction. Subsequent to any loss, damage to or
        destruction of the Collateral of any Credit Party or any part thereof,
        and subject to the provisions of the last sentence of this paragraph,
        such Credit Party, whether or not the insurance proceeds, if any,
        received on account of such damage or destruction shall be sufficient
        for that purpose, at such Credit Party's cost and expense, will promptly
        repair or replace the Collateral of such Credit Party so lost, damaged
        or destroyed; provided, however, that such Credit Party need not repair
        or replace the Collateral of such Credit Party so lost, damaged or
        destroyed to the extent the failure to make such repair or replacement
        (a) is desirable to the conduct of the business of such Credit Party in
        the ordinary course and otherwise is in the best interest of such Credit
        Party and (b) would not materially impair the rights and benefits of (i)
        the Administrative Agent or the Lenders under this Credit Agreement or
        any other Loan Document or (ii) the Collateral Agent and Secured Parties
        under (and as defined in) the Security Agreement. So long as no Event of
        Default has occurred and is continuing, the Administrative Agent, in its
        capacity as Collateral Agent under the Security Agreement, agrees to
        release any insurance proceeds received by it to the applicable Credit
        Party for replacement or restoration of the portion of the Collateral of
        such Credit Party lost, damaged or destroyed. In the event a Credit
        Party shall receive any insurance proceeds as a result of any loss,
        damage or destruction of Collateral in a net amount in excess of
        $1,000,000, the Credit Parties shall, within the period of 180 days
        following the date of receipt of such proceeds, apply (or cause


                                       6
<PAGE>

        to be applied) an amount equal to such proceeds to (x) make
        reinvestments consisting of acquisitions of assets used or useful in the
        same or a similar line of business as the Borrower and its subsidiaries
        were engaged in on the Closing Date (including but not limited to the
        repair or replacement of the related Collateral) or (y) prepay the
        Secured Obligations (as defined in the Security Agreement) (including by
        cash collateralizing letter of credit (but only after all outstanding
        loans under the same facility have been prepaid) or guaranty
        obligations) on a pro rata basis.

               The Administrative Agent is authorized, but not obligated, as the
        attorney-in-fact of each of the Credit Parties and for the benefit of
        the Lenders (and any other secured parties under the Security
        Agreement), upon the occurrence and during the continuance of an Event
        of Default, without the consent of the applicable Credit Party, (i) to
        adjust and compromise proceeds payable under such insurance policies,
        (ii) to collect, receive and give receipts for such insurance proceeds
        in the name of such Credit Party, the Administrative Agent and the
        Lenders (and any other secured parties under the Security Agreement) and
        (iii) to endorse such Credit Party's name upon any instrument in payment
        thereof.

               All insurance proceeds shall be subject to the security interest
        of the Secured Parties (as defined in the Security Agreement) under the
        Collateral Documents."

        11.    Amendment to Section 8.10 of the Credit Agreement. Section 8.10
of the Credit Agreement is hereby amended by inserting the following at the end
of the sentence found therein:

               "After the occurrence and during the continuance of an Event of
        Default, any such action shall be at the expense of the Credit Parties.
        In addition, the Credit Parties agree that the Administrative Agent, and
        its representatives, may conduct an audit of the Collateral annually
        (or, after the occurrence and during the continuance of an Event of
        Default, more frequently), at the expense of the Credit Parties."

        12.    Amendment to Article VIII of the Credit Agreement. Article VIII
of the Credit Agreement is hereby amended by inserting the following Sections in
numerical order:

        "(a)   SECTION 8.13 Pledged Assets.

               Each Credit Party will (i) cause all of its Property that
        constitutes (or pursuant to the terms hereof is intended to constitute)
        Collateral to be subject at all times to first priority, perfected Liens
        in favor of the Administrative Agent, as Collateral Agent for the
        ratable benefit of the Secured Parties referred to in the Collateral
        Documents, to secure the Obligations pursuant to the terms and
        conditions of the Collateral Documents, subject in any case to Liens
        permitted under Section 9.2 and the Security Agreement and (ii) deliver,
        or, in the case of agreements or other documents that require the
        consent of a non-Affiliate of the Borrower, use commercially reasonable
        efforts to deliver, such other documentation as the Administrative Agent
        may reasonably request in connection with the foregoing, including,
        without limitation, appropriate UCC-1 financing statements, landlord's
        waivers (subject to Section 8.14), certified resolutions and other
        organizational


                                       7
<PAGE>

and authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Administrative Agent's Liens thereunder), all in form, content
and scope reasonably satisfactory to the Administrative Agent.

        (b)    SECTION 8.14 Further Assurances Regarding Collateral.

               Each Credit Party shall:

               (i)    At its expense, from time to time execute and deliver, or
        cause to be executed and delivered, such additional instruments,
        certificates or documents, and take all such actions, as the
        Administrative Agent or the Required Lenders may reasonably request, for
        the purposes of implementing or effectuating the provisions of this
        Agreement and the other Loan Documents or creating or perfecting or
        ensuring the priority or sufficiency or enforceability or enforcement of
        a Lien in favor of the Administrative Agent as security for the
        Obligations upon any or all of the Collateral (whether owned prior to
        the Fourth Amendment Effective Date or thereafter acquired), or more
        fully perfecting or renewing any such Lien;

               (ii)   To the extent requested by the Administrative Agent, at
        such Credit Party's expense, if the exercise by the Administrative Agent
        or any Lender of any power, right, privilege or remedy pursuant to this
        Agreement or the other Loan Documents requires any consent, approval,
        recording, qualification or authorization of any Governmental Authority,
        execute and deliver, or cause the execution and delivery of, all
        applications, certifications, instruments and other documents and papers
        that may be required from the Borrower or any of its Subsidiaries or may
        reasonably be requested for such governmental consent, approval,
        recording, qualification or authorization; and

               (iii)  Use its commercially reasonable efforts to obtain within
        60 days of the Fourth Amendment Effective Date (or in the case of
        locations which meet the threshold set forth herein on a date subsequent
        to the Fourth Amendment Effective Date, within 45 days of the date on
        which a Responsible Officer of the Borrower becomes aware of such
        change) such landlord waiver and/or warehousemen and bailee letters, as
        applicable, in form and substance satisfactory to the Administrative
        Agent with respect to all Collateral located at a leased location or
        held by a warehouseman or bailee to the extent the aggregate value of
        the Collateral at such location exceeds $1,000,000."

        13.    Amendment to Section 9.1 of the Credit Agreement.

               (a)    Section 9.1(a) of the Credit Agreement is hereby amended
by deleting the table therein and replacing it with the following:


                                       8
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------
                  Period                           Ratio
-------------------------------------------------------------
<S>                                                <C>
  fiscal quarter ending March 31, 2001             72.5%
-------------------------------------------------------------
  fiscal quarter ending June 30, 2001              72.5%
-------------------------------------------------------------
  fiscal quarter ending September 30, 2001         72.5%
-------------------------------------------------------------
  fiscal quarter ending December 31, 2001          72.5%
-------------------------------------------------------------
  fiscal quarter ending March 31, 2002             70.0%
-------------------------------------------------------------
  fiscal quarter ending June 30, 2002              70.0%
-------------------------------------------------------------
  fiscal quarter ending September 30, 2002         70.0%
-------------------------------------------------------------
  fiscal quarter ending December 31, 2002          70.0%
-------------------------------------------------------------
  fiscal quarter ending March 31, 2003             70.0%
-------------------------------------------------------------
  fiscal quarter ending June 30, 2003              70.0%
-------------------------------------------------------------
  fiscal quarter ending September 30, 2003         67.5%
-------------------------------------------------------------
  fiscal quarter ending December 31, 2003 and      65.0%
  each fiscal quarter ending thereafter
-------------------------------------------------------------
</TABLE>

               (b)    Section 9.1(b) of the Credit Agreement is hereby amended
by deleting the text thereof in its entirety and replacing it with the
following:

               "(b)   Minimum Fixed Charge Coverage Ratio. As of the end of each
        fiscal quarter, commencing with the end of the first fiscal quarter
        ending after the Fourth Amendment Effective Date, the Credit Parties
        will not permit the Fixed Charge Coverage Ratio to be less than:

<TABLE>
<CAPTION>
-------------------------------------------------------------
                 Period                           Ratio
-------------------------------------------------------------
<S>                                              <C>
  fiscal quarter ending September 30, 2002       1.50:1.0
  and each fiscal quarter ending thereafter
-------------------------------------------------------------
</TABLE>

               (c)    Section 9.1(c) of the Credit Agreement is hereby amended
        in its entirety by replacing it with the following:

               "(c)   Minimum Tangible Net Worth. At all times after the Fourth
        Amendment Effective Date, the Credit Parties will not permit Tangible
        Net Worth to be less than the TNW Floor (as defined below) plus, as of
        the end of each fiscal quarter, commencing with the end of the first
        fiscal quarter ending after the Fourth Amendment Effective Date, (i) 50%
        of Net Income (to the extent positive) for the fiscal quarter then ended
        (or, with respect to the fiscal quarter in which the JS Industrial
        Packaging Group Acquisition occurs, for the portion of the fiscal
        quarter occurring after the date such acquisition is consummated), such
        increases to be cumulative, and (ii) 100% of the Net Cash Proceeds of
        Equity Issuances during the fiscal quarter then ended (or, with respect
        to the fiscal quarter in which the JS Industrial Packaging Group
        Acquisition occurs, for the portion of the fiscal quarter occurring
        after the date such acquisition is consummated), such increases to be
        cumulative. For purposes hereof, "TNW Floor" shall mean (A) initially,


                                       9
<PAGE>

        $108,900,000 and (B) upon the consummation of the JS Industrial
        Packaging Group Acquisition, 90% of actual Tangible Net Worth as of the
        date of such consummation (and after giving effect thereto), as
        calculated in good faith by the Borrower and as certified in writing to
        the Administrative Agent on the date of such consummation by a
        Responsible Officer of the Borrower."

        14.    Amendment to Section 9.2 of the Credit Agreement. Section 9.2 of
the Credit Agreement is hereby amended by (i) deleting the word "and" at the end
of subclause (i) thereof; (ii) replacing the period at the end of subclause (j)
thereof with "; and" and (iii) adding the following new subclause (k)
immediately to the end of such clause (j):

               "(k)   prior to the consummation of the JS Industrial Packaging
        Group Acquisition, Liens in favor of the trustee for (or escrow agent
        with respect to) the New Senior Subordinated Notes granted by the
        Borrower on the Borrower's interest in the proceeds from the issuance of
        such New Senior Subordinated Notes (it being understood that such Liens
        shall secure only the obligation of the Borrower to return such proceeds
        to the trustee for the New Senior Subordinated Notes (or such escrow
        agent) in the event the JS Industrial Packaging Group Acquisition fails
        to close)."

        15.    Amendment to Section 9.2(e) of the Credit Agreement. Section
9.2(e) of the Credit Agreement is hereby amended in its entirety by replacing it
with the following:

               "(e)   Liens in favor of the Administrative Agent (or another
        collateral agent acceptable to the Administrative Agent and the Required
        Lenders) for the benefit of (i) the Administrative Agent and the Lenders
        (and, with respect to Obligations under Hedging Agreements, Affiliates
        of the Lenders), (ii) to the extent a default would otherwise exist
        under the Senior Note Indenture, the holders of the Senior Notes, and
        (iii) in connection with the Security Agreement, the Secured Parties (as
        defined in the Security Agreement);"

        16.    Amendment to Section 9.3(f) of the Credit Agreement. Section
9.3(f) of the Credit Agreement is hereby amended in its entirety by replacing it
with the following:

        "(f)   Debt owing under the Senior Subordinated Notes, New Senior Notes
               and the New Senior Subordinated Notes not to exceed in the
               aggregate principal at any time outstanding an amount equal to
               (i) $375,000,000 less (ii) the aggregate amount of any Senior
               Subordinated Notes, New Senior Notes and/or New Senior
               Subordinated Notes that have been permanently prepaid, redeemed
               or otherwise retired; provided that, in connection with the
               issuance of any New Senior Subordinated Notes, the Borrower
               shall, promptly upon such issuance, deliver a copy, certified by
               an officer of the Borrower as true and complete, of the New
               Senior Subordinated Note Indenture and each other material
               document executed in connection therewith, in each case as
               originally executed and delivered and together with all exhibits
               and schedules thereto."

        17.    Amendment to Section 9.5 of the Credit Agreement. Section 9.5 of
the Credit Agreement is hereby amended by adding the following at the end of the
paragraph found therein:


                                       10
<PAGE>

               "Upon a sale of assets permitted by this Section 9.5 and the
        Security Agreement, the Administrative Agent shall (to the extent
        applicable) deliver to the Credit Parties, upon the Credit Parties'
        request and at the Credit Parties' expense, such documentation as is
        reasonably necessary to evidence the release of the Administrative
        Agent's security interest, if any, in such assets, including, without
        limitation, amendments or terminations of UCC financing statements, if
        any, and the release of such Credit Party from all of its obligations,
        if any, under the Loan Documents."

        18.    Amendment to Section 9.6 of the Credit Agreement. Section 9.6 of
the Credit Agreement is hereby amended in its entirety by replacing it with the
following:

        "SECTION 9.6 Limitations on Acquisitions.

               Other than transactions permitted under Section 9.7, no Credit
        Party will, nor will it permit any of its Subsidiaries to, acquire all
        or any portion of the Capital Stock or other ownership interest in any
        Person which is not a Subsidiary or all or any substantial portion of
        the assets, property and/or operations of a Person which is not a
        Subsidiary, except (a) the JS Industrial Packaging Group Acquisition and
        (b) other acquisitions, so long as, with respect to transactions
        permitted under this clause (b), (i) the Person, assets, property and/or
        operations being acquired engage in or are engaged in the same line of
        business as that engaged in by the Borrower and its Subsidiaries on the
        Closing Date or a business reasonably related thereto, (ii) in the case
        of an acquisition of Capital Stock or other ownership interest of a
        Person, the Board of Directors of the Person which is the subject of
        such acquisition shall have approved the acquisition, (iii) no Default
        or Event of Default shall exist on the date of, or shall result from,
        any such acquisition (including after giving effect to such transaction
        on a pro forma basis), and (iv) the aggregate cash consideration for
        each such acquisition does not exceed $25,000,000 and the aggregate
        consideration (cash and noncash) for all such acquisitions consummated
        in any twelve-month period does not exceed $50,000,000."

        19.    Amendment to Section 9.13 of the Credit Agreement. Section 9.13
of the Credit Agreement is hereby amended in its entirety by deleting the last
paragraph of such section in its entirety and replacing it with the following:

               "Notwithstanding the foregoing, but subject to the following
        proviso, the Borrower may acquire (and thereafter retire or redeem) up
        to $30,000,000 in aggregate principal amount of the Senior Subordinated
        Notes so long as no Default or Event of Default shall exist on the date
        of, or shall result from, any such transaction (including after giving
        effect to such transaction on a pro forma basis); provided, however, in
        the event that the Borrower (i) consummates the JS Industrial Packaging
        Group Acquisition and (ii) has not, prior to or concurrently with the
        consummation of the JS Industrial Packaging Group Acquisition, (x)
        issued New Senior Subordinated Notes on terms and conditions reasonably
        satisfactory to the Administrative Agent, (y) received gross proceeds
        from the issuance of such New Senior Subordinated Notes in an aggregate
        amount of not less than $50,000,000, and (z) (I) reduced the aggregate
        principal amount of the Revolving Credit Loans to $0.00, and (II)
        delivered to the Administrative Agent an


                                       11
<PAGE>

        unaudited Consolidated balance sheet for the Borrower that shows a
        balance for cash and Cash Equivalents of not less than $50,000,000
        (which balance sheet shall be certified by a Responsible Officer of the
        Borrower and shall be in form and substance reasonably satisfactory to
        the Administrative Agent), the foregoing provision shall cease to be
        effective and the Borrower shall not be permitted to acquire Senior
        Subordinated Notes in reliance thereon until the first date thereafter
        (the "Liquidity Restoration Date") on which both (A) the aggregate
        outstanding principal amount of the Revolving Credit Loans equals $0.00
        and (B) the Borrower's unaudited Consolidated balance sheet shows a
        balance for cash and Cash Equivalents of not less than $50,000,000
        (which balance sheet shall be certified by a Responsible Officer of the
        Borrower, shall have been delivered to the Administrative Agent and
        shall be in form and substance reasonably satisfactory to the
        Administrative Agent). Upon the occurrence of the Liquidity Restoration
        Date, such provision shall again be effective automatically and without
        the necessity of any further action on the part of any party hereto.

        20.    Amendment to Section 11.1 of the Credit Agreement. Section 11.1
of the Credit Agreement is hereby amended by adding a new clause (q) at the end
thereof to read as follows:

               "(q)   JV Debt Cross-Default. The occurrence of (i) any event of
        default under the Standard Gypsum Credit Facility or the Premier
        Boxboard Credit Facility (beyond the period of grace, if any, provided
        therein) or (ii) any demand for payment under (A) the Borrower's
        guaranty of Standard Gypsum's obligations under the Standard Gypsum
        Credit Facility or (B) the Borrower's guaranty of Premier Boxboard's
        obligations under the Premier Boxboard Credit Facility."

        21.    Amendment to Section 13.9(d) of the Credit Agreement. Section
13.9(d)(iii) of the Credit Agreement which reads "or (iii) release all or
substantially all of the Guarantors from their obligations hereunder" is hereby
deleted and replaced with the following:

               ", (iii) release all or substantially all of the Guarantors from
        their obligations hereunder or (iv) except as a result of or in
        connection with an Asset Disposition permitted by Section 9.5, release
        all or substantially all of the Collateral."

        22.    Modification to Section 13.11 of the Credit Agreement. Section
13.11 of the Credit Agreement is modified as follows to fix a typographical
error: The reference to "this Section 13.10" contained in clause (g) of the
proviso found therein is replaced with a reference to "this Section 13.11".

        23.    Amendment to Article XIII of the Credit Agreement. A new Section
13.20 is hereby added to the Credit Agreement to read as follows:

        "SECTION 13.20 MATTERS RELATING TO SECURITY AGREEMENT.

               Notwithstanding anything to the contrary contained herein, and
        without limiting the generality of Section 12.1, each of the Lenders
        hereby (a) irrevocably designates and appoints Bank of America as
        Collateral Agent of such Lender under the Security Agreement and the
        other Collateral Documents for the term hereof and each such Lender


                                       12
<PAGE>

        irrevocably authorizes Bank of America as Collateral Agent for such
        Lender, to execute and deliver the Security Agreement, to take such
        action on its behalf under the provisions of the Security Agreement and
        the other Collateral Documents and to exercise such powers and perform
        such duties as are expressly delegated to the Collateral Agent by the
        terms of the Security Agreement and such other Collateral Documents,
        together with such other powers as are reasonably incidental thereto and
        (b) acknowledges and agrees that (i) the Security Agreement provides
        that the Collateral (and proceeds thereof) are to be shared ratably
        among the Secured Parties referred to in the Security Agreement and that
        the Required Secured Parties (as defined in the Security Agreement) can
        direct the Collateral Agent to act (or refrain from acting) with respect
        to the Collateral and (ii) the Security Agreement may not be amended
        except in accordance with the provisions of Section 13 thereof (which
        provisions may, in certain instances, require the consent of certain
        Secured Parties referred to in the Security Agreement in addition to
        consent of the Required Lenders hereunder)."

        24.    Amendment to Exhibit G to the Credit Agreement. Exhibit G to the
Credit Agreement is hereby amended in its entirety by replacing it with the new
Exhibit G attached hereto.

        25.    New Exhibit I of the Credit Agreement. Exhibit I attached hereto
is hereby added as a new Exhibit I to the Credit Agreement.

        26.    Representations and Warranties. Each Credit Party hereby
represents and warrants to the Administrative Agent and the Lenders that (a) no
Default or Event of Default exists; (b) all of the representations and
warranties set forth in the Loan Documents are true and correct in all material
respects as of the date hereof (except for those that expressly state that they
are made as of an earlier date); and (c) it has no claims, counterclaims,
offsets, credits or defenses to its obligations under the Loan Documents or, to
the extent it does, they are hereby released in consideration of the Lenders
entering into this Amendment.

        27.    Conditions Precedent to Effectiveness. This Amendment shall be
effective as of the Fourth Amendment Effective Date when (and only when) each of
the following conditions precedent has been satisfied:

               (a)    The Administrative Agent shall have received from the
        Credit Parties and the Lenders duly executed counterparts of this
        Amendment;

               (b)    The Administrative Agent shall have received from the
        Borrower an amendment fee equal to 0.25% multiplied by the aggregate
        Revolving Credit Commitments of the Lenders, such fee being for the
        account of each such Lender pro rata according to such Lender's
        Revolving Credit Commitment as of the Fourth Amendment Effective Date
        (it being understood that such fee is in addition to the amendment fee
        previously paid by the Borrower to the Administrative Agent for the
        benefit of the Lenders consenting to the June 2002 Amendment, upon the
        closing of the June 2002 Amendment);


                                       13
<PAGE>

               (c)    The Credit Parties shall have paid any and all
        out-of-pocket costs (to the extent invoiced) incurred by the
        Administrative Agent (including the reasonable fees and expenses of the
        Administrative Agent's legal counsel), and fees and other amounts
        payable to the Administrative Agent, in each case in connection with the
        arrangement, negotiation, preparation, execution and delivery of this
        Amendment;

               (d)    The Administrative Agent shall have received (i) from the
        Credit Parties, duly executed counterparts of the Security Agreement and
        (ii) from counsel to the Credit Parties, a legal opinion in form and
        substance acceptable to the Administrative Agent and its counsel (which
        shall cover, among other things, the legality, validity, binding effect
        and enforceability of the Security Agreement and the creation and
        perfection of the Administrative Agent's Liens thereunder);

               (e)    The Administrative Agent shall have received evidence
        satisfactory to it that the Borrower shall have obtained amendments to
        its guaranties in connection with the Premier Boxboard Credit Facility
        and the Standard Gypsum Credit Facility that conform to the applicable
        terms of this Amendment; and

               (f)    The representations and warranties contained in Section 26
        of this Amendment shall be true and correct in all material respects on
        and as of such Fourth Amendment Effective Date (including after giving
        effect to the consummation of the JS Industrial Packaging Group
        Acquisition, but only if consummated on or prior to such date) with the
        same effect as if made on and as of such date.

        28.    Ratification of Credit Agreement. Except as expressly modified
and amended in this Amendment, all of the terms, provisions and conditions of
the Loan Documents shall remain unchanged and in full force and effect. The term
"this Agreement" or "Credit Agreement" and all similar references as used in
each of the Loan Documents shall hereafter mean the Credit Agreement as amended
by this Amendment. Except as herein specifically agreed, the Credit Agreement is
hereby ratified and confirmed and shall remain in full force and effect
according to its terms.

        29.    Authority/Enforceability. Each of the Credit Parties hereto
represents and warrants as follows:

               (a)    It has taken all necessary action to authorize the
        execution, delivery and performance of this Amendment.

               (b)    This Amendment has been duly executed and delivered by
        such Person and constitutes such Person's legal, valid and binding
        obligations, enforceable in accordance with its terms, except as such
        enforceability may be subject to (i) bankruptcy, insolvency,
        reorganization, fraudulent conveyance or transfer, moratorium or similar
        laws affecting creditors' rights generally and (ii) general principles
        of equity (regardless of whether such enforceability is considered in a
        proceeding at law or in equity).


                                       14
<PAGE>

               (c)    No consent, approval, authorization or order of, or
        filing, registration or qualification with, any court or governmental
        authority or third party is required in connection with the execution,
        delivery or performance by such Person of this Amendment. The execution,
        delivery and performance by such Person of this Amendment do not and
        will not conflict with, result in a breach of or constitute a default
        under the articles of incorporation, bylaws or other organizational
        documents of any Credit Party or any of its Subsidiaries or any
        indenture or other material agreement or instrument to which such Person
        is a party or by which any of its properties may be bound or any
        Governmental Approval relating to such Person except as could not
        reasonably be expected to have a Material Adverse Effect.

        30.    Expenses. The Borrower agrees to pay all reasonable costs and
expenses in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Moore & Van Allen PLLC, special counsel to the Administrative Agent.

        31.    Counterparts/Telecopy. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered.

        32.    GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.

        33.    Entirety. This Amendment and the other Loan Documents embody the
entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof. These Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no oral agreements between the parties.



                                       15
<PAGE>

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

BORROWER:             CARAUSTAR INDUSTRIES, INC.,
                      a North Carolina corporation

                      By: /s/ H. LEE THRASH, III
                          ----------------------------------------
                      Name:  H. Lee Thrash, III
                      Title: Vice President Planning & Development
                             and Chief Financial Officer

<PAGE>


GUARANTORS:      AUSTELL HOLDING COMPANY, LLC,
                 a Georgia limited liability company
                 CAMDEN PAPERBOARD CORPORATION,
                 a New Jersey corporation
                 CARAUSTAR CUSTOM PACKAGING GROUP, INC.,
                 a Delaware corporation
                 CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC.,
                 a Maryland corporation
                 CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC.,
                 a Delaware corporation
                 CARAUSTAR MILL GROUP, INC.,
                 an Ohio corporation f/k/a Caraustar Paperboard Corporation
                 CARAUSTAR RECOVERED FIBER GROUP, INC.,
                 a Delaware corporation
                 CHICAGO PAPERBOARD CORPORATION,
                 an Illinois corporation
                 FEDERAL TRANSPORT, INC.,
                 an Ohio corporation
                 GYPSUM MGC, INC.,
                 a Delaware corporation
                 HALIFAX PAPER BOARD COMPANY, INC.,
                 a North Carolina corporation
                 MCQUEENEY GYPSUM COMPANY,
                 a Delaware corporation
                 MCQUEENY GYPSUM COMPANY, LLC,
                 a Delaware limited liability company
                 PBL INC.,
                 a Delaware corporation
                 SPRAGUE PAPERBOARD, INC.,
                 a Connecticut corporation


                 By: /s/ H. LEE THRASH, III
                     ----------------------------------------
                 Name:  H. Lee Thrash, III
                 Title: Vice President Planning & Development
                        and Chief Financial Officer


                        of each of the Foregoing Guarantors


<PAGE>

                 CARAUSTAR, G.P.,
                 a South Carolina general partnership

                 By:    CARAUSTAR INDUSTRIES, INC.,
                        a North Carolina corporation, general partner

                 By: /s/ H. LEE THRASH, III
                     ----------------------------------------
                 Name:  H. Lee Thrash, III
                 Title: Vice President Planning & Development
                        and Chief Financial Officer

                 By:    CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS
                        GROUP, INC., a Delaware corporation, general partner

                 By: /s/ H. LEE THRASH, III
                     ----------------------------------------
                 Name:  H. Lee Thrash, III
                 Title: Vice President Planning & Development
                        and Chief Financial Officer

<PAGE>



ADMINISTRATIVE
AGENT:                 BANK OF AMERICA, N.A., in its capacity
                       as Administrative Agent

                       By:    /s/ THOMAS R. SULLIVAN
                          ---------------------------------
                       Name:  Thomas R. Sullivan
                            -------------------------------
                       Title: Vice President
                             ------------------------------

<PAGE>

LENDERS:               BANK OF AMERICA, N.A.,
                       as an Issuing Lender and a Lender


                       By:    /s/ THOMAS R. SULLIVAN
                          ---------------------------------
                       Name:  Thomas R. Sullivan
                            -------------------------------
                       Title: Vice President
                             ------------------------------

<PAGE>

                       BANKERS TRUST COMPANY,
                       individually as an Issuing Lender and a Lender


                       By:    /s/ THOMAS R. SULLIVAN
                          ---------------------------------
                       Name:  Thomas R. Sullivan
                            -------------------------------
                       Title: Vice President
                             ------------------------------

<PAGE>

                             CREDIT SUISSE FIRST BOSTON


                             By:    /s/ JAY CHALL
                                ---------------------------------
                             Name:  Jay Chall
                                  -------------------------------
                             Title: Director
                                   ------------------------------


                             By:    /s/ KARL STUDER
                                ---------------------------------
                             Name:  Karl Studer
                                  -------------------------------
                             Title: Director
                                   ------------------------------

<PAGE>

                             CREDIT LYONNAIS NEW YORK BRANCH

                             By:    /s/ SCOTT R. CHAPPELKA
                                ---------------------------------
                             Name:  Scott R. Chappelka
                                  -------------------------------
                             Title: Vice President
                                   ------------------------------

<PAGE>

                             THE BANK OF NEW YORK


                             By:    /s/ RONALD R. REEDY
                                ---------------------------------
                             Name:  Ronald R. Reedy
                                  -------------------------------
                             Title: Vice President
                                   ------------------------------

<PAGE>

                                    EXHIBIT G

                    FORM OF OFFICER'S COMPLIANCE CERTIFICATE

        The undersigned, on behalf of Caraustar Industries, Inc., a North
Carolina corporation (the "Borrower"), hereby certifies to the Administrative
Agent and the Lenders, each as defined in the Credit Agreement referred to
below, as follows:

        1.     This Certificate is delivered to you pursuant to Section 6.2 of
the Credit Agreement dated as of March 29, 2001 (as amended, restated or
otherwise modified, the "Credit Agreement") by and among the Borrower, the
Subsidiaries of the Borrower identified therein, the Lenders from time to time
party thereto (the "Lenders") and Bank of America, N.A., as Administrative
Agent. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.

        2.     I have reviewed the financial statements of the Borrower and its
Subsidiaries dated as of ______________ and for the _______________ period[s]
then ended and such statements present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries as of their respective
dates and the results of the operations of the Borrower and its Subsidiaries for
the respective period[s] then ended, subject to normal year end adjustments for
interim statements.

        3.     I have reviewed the terms of the Credit Agreement and the related
Loan Documents and have made, or caused to be made under my supervision, a
review in reasonable detail of the transactions and the condition of the
Borrower and its Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Default or an Event of Default, nor do I
have any knowledge of the existence of any such condition or event as at the
date of this Certificate [except, if such condition or event existed or exists,
describe the nature and period of existence thereof and what action the Borrower
and its Subsidiaries have taken, are taking and propose to take with respect
thereto].

        4.     The Applicable Percentage Pricing Level and information as to the
financial ratios necessary for determining such figure are set forth on the
attached Schedule 1.

        5.     The Borrower and its Subsidiaries are in compliance with the
financial covenants contained in Section 9.1 of the Credit Agreement as shown on
such Schedule 1.

                            [Signature Page Follows]

<PAGE>

        WITNESS the following signature as of the ___ day of ___________, 200__.

                                        CARAUSTAR INDUSTRIES, INC.,
                                        a North Carolina corporation

                                        By:
                                            ----------------------------
                                        Name:
                                              --------------------------
                                        Title:
                                               -------------------------

<PAGE>

                                   Schedule 1

            Financial Covenant and Applicable Percentage Calculations


                                  See attached

<PAGE>

                                    EXHIBIT I

                           FORM OF SECURITY AGREEMENT


                                [to be attached]