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                                                                   EXHIBIT 10.11

                      FIRST AMENDMENT TO SECURITY AGREEMENT


         THIS FIRST AMENDMENT TO SECURITY AGREEMENT (this "Amendment") is
entered into as of March 28, 2003 among (i) CARAUSTAR INDUSTRIES, INC. (the
"Borrower"), (ii) the Subsidiaries of the Borrower listed on the signature pages
hereto (individually a "Guarantor" and collectively the "Guarantors"; together
with the Borrower, individually an "Obligor" and collectively the "Obligors")
and BANK OF AMERICA, N.A., in its capacity as collateral agent (in such, the
"Collateral Agent") for the Secured Parties (as defined in the Security
Agreement referenced below).

                                    RECITALS

                  WHEREAS, pursuant to that certain Credit Agreement, dated as
of March 29, 2001 (as amended, modified, extended, renewed or replaced from time
to time, the "Credit Agreement"), among the Borrower, the Guarantors, the
financial institutions from time to time party thereto (the "Lenders") and Bank
of America, N.A. ("Bank of America"), as Administrative Agent, the Lenders have
agreed to make Loans and issue Letters of Credit upon the terms and subject to
the conditions set forth therein (terms used but not otherwise defined herein
shall have the meaning given to such terms in the Credit Agreement or Security
Agreement, as applicable);

                  WHEREAS, in connection with the Fourth Amendment to Credit
Agreement dated as of September 23, 2002, among the Borrower, the Guarantors,
the Lenders party thereto and the Administrative Agent, the Obligors and the
Collateral Agent entered into the Security Agreement in consideration of, and as
a condition precedent to the effectiveness of, the Fourth Amendment.

                  WHEREAS, the Obligors are required to enter into this
Amendment in consideration of, and as a condition precedent to the effectiveness
of, that certain Sixth Amendment to Credit Agreement dated as of the date hereof
among the Borrower, the Guarantors, the Lenders party thereto and the
Administrative Agent.

                  NOW, THEREFORE, in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1.       AMENDMENTS TO SECURITY AGREEMENT.

         (a)      Section 1(a) of the Security Agreement is amended by adding
the following term to the list of terms contained therein that are defined
pursuant to the Uniform Commercial Code as in effect in the State of North
Carolina: "Equipment."

         (b)      Section 1(b) of the Security Agreement is amended by
substituting each of the following new definitions for the respective existing
definitions set forth therein:


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                  "Documents": the collective reference to the Credit Agreement,
         the Loan Documents, the Premier Boxboard Guaranty (subject to Section
         30 hereof), the Standard Gypsum Guaranty (subject to Section 31
         hereof), and any Hedging Agreements between an Obligor and a Lender or
         any Affiliate of a Lender.

                  "Secured Obligations": with respect to the Collateral, all of
         the following, whether now existing or hereafter incurred: (i) the
         prompt performance and observance by each Obligor of all of its
         Obligations to the Lenders under the Loan Documents, including, without
         limitation, (a) all obligations consisting of principal of and interest
         on (including interest accruing after the filing of any bankruptcy or
         similar petition) the Loans, all fees, indemnities and other amounts
         arising under any of the Loan Documents and all reimbursement
         obligations in respect of Letters of Credit, (b) all guaranty
         obligations arising out of Article X of the Credit Agreement and (c)
         all obligations arising under any Hedging Agreements between any
         Obligor and any Lender, or any Affiliate of a Lender, (ii) subject to
         Section 30 hereof, the prompt performance and observance by the
         Borrower of all of its guaranty obligations to SunTrust under the
         Premier Boxboard Guaranty, (iii) subject to Section 31 hereof, the
         prompt performance and observance by the Borrower of all of its
         guaranty obligations to Toronto Dominion under the Standard Gypsum
         Guaranty, and (iv) all other indebtedness, liabilities and obligations
         of any kind or nature, now existing or hereafter arising, owing from
         any Obligor to any Secured Party or the Collateral Agent under any of
         the Documents, howsoever evidenced, created, incurred or acquired,
         whether primary, secondary, direct, contingent, or joint and several,
         and all obligations and liabilities incurred in connection with
         collecting and enforcing the Secured Obligations.

                  "Secured Parties": the collective reference to (i) the Lenders
         and any Affiliate of a Lender that has entered into a Hedging
         Agreement, (ii) subject to Section 30 hereof, SunTrust and (iii)
         subject to Section 31 hereof, Toronto Dominion, and "Secured Party"
         means any one of them, as applicable.

         (c)      Section 1(b) of the Security Agreement is further amended by
inserting the following definition where alphabetically appropriate:

                  "Equipment Collateral Effective Date" means July 1, 2003.

         (d)      Section 2 of the Security Agreement is amended by (i)
restating clauses (c) and (d) thereof as clauses (d) and (e) thereof,
respectively, and inserting the following as clause (c) thereof:

                  "(c) Subject to Section 29 hereof, all Equipment (the
         "Equipment Collateral")."

         (e)      Section 4 of the Security Agreement is hereby amended by
deleting clause (d) thereof and replacing it with the following:

                  "(d) Security Interest/Priority. This Security Agreement shall
         create a valid security interest in favor of the Collateral Agent, for
         the ratable benefit of the Secured Parties, in the Collateral of such
         Obligor and, when properly perfected by filing, shall


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         constitute a valid perfected security interest in such Collateral, to
         the extent such security interest can be perfected by filing under the
         UCC, free and clear of all Liens except for Liens permitted under
         Section 9.2 of the Credit Agreement as in effect on the date hereof;
         provided, however, any Liens on the Collateral permitted pursuant to
         Section 9.2(j) of the Credit Agreement as in effect on the date hereof
         shall not exceed $1,000,000 in the aggregate at any time outstanding;
         and provided further that the foregoing representations and warranties
         shall only be applicable with respect to Equipment Collateral upon the
         Equipment Collateral Effective Date.

         (f)      Section 5 of the Security Agreement is amended by adding the
following as new clauses (j) and (k) thereof:

                  "(j) Nature of Collateral. At all times maintain the
         Collateral as personal property and not affix any of the Collateral to
         any real property in a manner which would change its nature from
         personal property to real property or a Fixture to real property,
         unless the Administrative Agent shall have a perfected Lien on such
         Fixture or real property.

                  (k) Legal Opinion. Upon the occurrence of the Equipment
         Collateral Effective Date, the Borrower shall deliver to the Collateral
         Agent a legal opinion from counsel to the Credit Parties in form and
         substance acceptable to the Collateral Agent and its counsel (which
         shall cover, among other things, the enforcability of the Security
         Agreement with respect to the Equipment Collateral and the creation and
         perfection of the Collateral Agent's Liens hereunder on the Equipment
         Collateral)."

         (g)      Section 5 of the Security Agreement is further amended by
adding the following as a new last paragraph thereof:

         "Notwithstanding the foregoing provisions of this Section 5, none of
         such provisions shall be applicable with respect to the Equipment
         Collateral until the Equipment Collateral Effective Date and
         thereafter."

         (h)      Section 7 of the Security Agreement is amended by deleting
such section in its entirety and replacing it with the following:

                  "7.      Events of Default.

                  "Any of (a) the occurrence of an event which under the Credit
         Agreement would constitute an Event of Default thereunder, (b) subject
         to Section 30 hereof, the occurrence of an event which gives SunTrust
         the right to demand payment under the Premier Boxboard Guaranty or (c)
         subject to Section 31 hereof, the occurrence of an event which gives
         Toronto Dominion the right to demand payment under the Standard Gypsum
         Guaranty shall be an Event of Default hereunder (an "Event of
         Default")."


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         (i)      Section 8 of the Security Agreement is amended by adding the
following as the last paragraph thereof:

                  "Notwithstanding the foregoing provisions of this Section 8,
         to the extent any such provisions are subject to the occurrence and
         continuation of an Event of Default, any such provision shall only be
         applicable with respect to the Equipment Collateral upon the occurrence
         and during the continuance of an Event of Default occurring
         simultaneously with or subsequent to the Equipment Collateral Effective
         Date."

         (j)      Section 9 of the Security Agreement is amended by adding the
following as the last paragraph thereof"

                  "Notwithstanding the foregoing provisions of this Section 9,
         to the extent any rights and/or remedies detailed in such provisions
         are subject to the occurrence and continuation of an Event of Default,
         any such provision shall only be applicable with respect to the
         Equipment Collateral upon the occurrence and during the continuance of
         an Event of Default occurring simultaneously with or subsequent to the
         Equipment Collateral Effective Date."

         (k)      Section 10(d) of the Security Agreement is amended by deleting
such section in its entirety and replacing it with the following:

                  "(d) FOURTH, to the payment of (i) all fees of the
         Administrative Agent and (ii) subject to paragraphs 30 and 31 hereof,
         all fees of SunTrust and Toronto Dominion, if any, that are in the
         nature of administrative agent's fees, in each case that are then due
         and payable under the Documents or otherwise in connection with the
         Secured Obligations, pro rata as set forth below;"

         (l)      Section 13 of the Security Agreement is amended by adding the
following as a new second paragraph thereof:

                  "(b) Notwithstanding anything to the contrary herein or in the
         Credit Agreement, the definition of "Equipment Collateral Effective
         Date" as set forth herein may not be amended, modified, changed,
         discharged or terminated in a manner adverse to the Secured Parties
         except with the prior written consent of each Secured Party."

         (l)      Section 14 of the Security Agreement is amended by deleting
such section in its entirety and replacing it with the following:

                  "14. Successors in Interest. This Security Agreement shall
         create a continuing security interest in the Collateral (except with
         respect to the Equipment Collateral, with respect to which the creation
         of a continuing security interest shall be effective as of the
         Equipment Collateral Date) and shall be binding upon each Obligor, its
         successors and assigns and shall inure, together with the rights and
         remedies of the Collateral Agent and the Secured Parties hereunder, to
         the benefit of the Collateral Agent and the Secured Parties, on


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         a ratable basis, and their successors and permitted assigns; provided,
         however, that none of the Obligors may assign its rights or delegate
         its duties hereunder without the prior written consent of each Secured
         Party (or, with respect to the Lenders, the Required Lenders, as
         required by the Credit Agreement)."

         (m)      The Security Agreement is amended by inserting the following
as a new Section 29 thereof:

                  "29. Equipment Collateral Effective Date. Notwithstanding
         anything in this Security Agreement to the contrary, the grant of a
         security interest in Equipment Collateral pursuant to Section 2 hereof
         shall not become effective until the Equipment Collateral Effective
         Date; provided that on such Equipment Collateral Effective Date such
         grant of a security interest shall become effective immediately and
         without any further action on the part of any of the parties hereto."

         (n)      The Security Agreement is amended by inserting the following
as a new Section 30 thereof:

                  "30. Termination by SunTrust: SunTrust acknowledges and agrees
         that effective upon the termination of, and payment in full in cash of
         all obligations of the Borrower under, the Premier BoxBoard Guaranty,
         (w) SunTrust shall have no further rights under or be entitled to any
         benefits of the Security Agreement, (x) the Collateral Agent shall no
         longer hold a security interest in the Collateral for the benefit of
         SunTrust, (y) SunTrust shall no longer be a "Secured Party" hereunder,
         nor shall the Borrower's performance and obligations to SunTrust under
         the Premier Boxboard Guarantee be deemed a "Secured Obligation"
         hereunder, and (z) upon reasonable request by the Borrower, SunTrust
         shall confirm in writing such termination and payment to the Collateral
         Agent."

         (o)      The Security Agreement is amended by inserting the following
as a new Section 31 thereof:

                  "31. Termination by Toronto Dominion: Toronto Dominion
         acknowledges and agrees that effective upon the earlier of (i) the
         termination of, and payment in full in cash of all obligations of the
         Borrower under, the Standard Gypsum Guaranty, and (ii) Toronto
         Dominion's receipt of a standby letter of credit in the amount of
         $28,369,452.50 issued by Bank of America and naming Toronto Dominion as
         beneficiary (or any other letter of credit acceptable to Toronto
         Dominion issued in connection with Standard Gypsum's industrial revenue
         bond obligations), which letter of credit is intended to replace the
         Borrower's guaranty obligations under the Standard Gypsum Guaranty, (w)
         Toronto Dominion shall have no further rights under or be entitled to
         any benefits of the Security Agreement, (x) the Collateral Agent shall
         no longer hold a security interest in the Collateral for the benefit of
         Toronto Dominion, (y) Toronto Dominion shall no longer be a "Secured
         Party" hereunder, nor shall the Borrower's performance and obligations
         to Toronto Dominion under the Standard Gypsum Guaranty be deemed a
         "Secured


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         Obligation" hereunder and (z) upon reasonable request by the Borrower,
         Toronto Dominion shall confirm in writing such termination and payment
         or receipt, as applicable, to the Collateral Agent."

         2.       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).

                  (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.

         3.       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.

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


                  [remainder of page intentionally left blank]

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         Each of the parties hereto has caused a counterpart of this First
Amendment to Security Agreement to be duly executed and delivered as of the date
first above written.


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


                                    By:    Ronald J. Domanico
                                       --------------------------------------
                                    Name:  Ronald J. Domanico
                                    Title: Vice President 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/ Ronald J. Domanico
                         --------------------------------------
                  Name:  Ronald J. Domanico
                  Title: Vice President
                         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/ Ronald J. Domanico
                                  --------------------------------------
                           Name:  Ronald J. Domanico
                           Title: Vice President & Chief Financial Officer


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

                           By:    /s/ Ronald J. Domanico
                                  --------------------------------------
                           Name:  Ronald J. Domanico
                           Title: Vice President & Assistant Secretary


                  RECCMG, LLC,
                  a Georgia limited liability company
                  PARADIGM CHEMICAL & CONSULTING, LLC,
                  a Georgia limited liability company

                  By:      CARAUSTAR MILL GROUP, INC.,
                           an Ohio corporation f/k/a Caraustar Paperboard
                           Corporation, sole member of each of the foregoing
                           Guarantors

                           By:    /s/ Ronald J. Domanico
                                  --------------------------------------
                           Name:  Ronald J. Domanico
                           Title: Vice President, Secretary and Treasurer

                  CICPG, LLC,
                  a North Carolina limited liability company

                  By:      CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS
                           GROUP, INC., a Delaware corporation, sole member

                           By:    /s/ Ronald J. Domanico
                                  --------------------------------------
                           Name:  Ronald J. Domanico
                           Title: Vice President & Assistant Secretary



<PAGE>


Agreed and Accepted to as of the date first above written.

BANK OF AMERICA, N.A.,
in its capacity as Collateral Agent

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


The undersigned hereby acknowledges, accepts and consents to the foregoing
First Amendment to Security Agreement and agrees to the terms of Section 29 of
the Security Agreement as amended by the First Amendment thereto:

BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent for the Lenders

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


The undersigned hereby acknowledges, accepts and consents to the foregoing
First Amendment to Security Agreement and agrees to the terms of Sections 29 and
30 of the Security Agreement as amended by the First Amendment thereto:

SUNTRUST BANK, ATLANTA

By:   /s/  J. Scott Dwinig
   --------------------------------------------------
Name:  J. Scott Dwinig
     ------------------------------------------------
Title: Vice President
      -----------------------------------------------



The undersigned hereby acknowledges, accepts and consents to the foregoing
First Amendment to Security Agreement and agrees to the terms of Sections 29 and
31 of the Security Agreement as amended by the First Amendment thereto:

TORONTO DOMINION (TEXAS), INC.

By:   /s/  Carol Brandt
   --------------------------------------------------
Name:  Carol Brandt
     ------------------------------------------------
Title:  Vice President
      -----------------------------------------------