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                                    GUARANTY

         GUARANTY dated as of May 13, 1997 made by the undersigned ("Guarantor")
in favor of The Chase Manhattan Bank, and/or any of its subsidiaries or
affiliates (individually or collectively, as the context may require, the
"Bank").

         PRELIMINARY STATEMENTS: The Bank has agreed to enter into agreements or
arrangements with Marc P. Shore and Debra Shore (collectively, the "Borrower")
providing for the making of a loan to the Borrower in the principal amount of
$8,500,000, with a 15 month term (the said loan herein called the "Facility",
and any writing evidencing, supporting or securing the Facility, including but
not limited to this Guaranty, being a "Facility Document"). The Facility
Documents include a promissory note dated May 13, 1997, in the original
principal amount of $8,500,000 (the "Note") and a first mortgage deed (the
"Mortgage") securing the Note and covering certain real property on Clapboard
Ridge Road, Greenwich, CT (the "Mortgaged Premises"). The Guarantor is
financially interested in the affairs of the Borrower.

         THEREFORE, in order to induce the Bank to extend credit or give
financial accommodation under the Facility, the Guarantor agrees as follows:

         Section 1. Guaranty of Payments. The Guarantor unconditionally and
irrevocably guarantees to the Bank the punctual payment of all sums now owing or
which may in the future be owing by the Borrower under the Facility, when the
same are due and payable, whether on demand, at stated maturity, by acceleration
or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise; provided that the aggregate liability of the
Guarantor shall not exceed $3,000,000 in principal amount, plus any accrued and
unpaid interest thereon at the Default Rate under the Note from the date of the
Borrower's default under the Note and the Bank's costs of collection, including
without limitation reasonable attorneys' fees (collectively herein called the
"Liabilities"), provided, further, however, it is understood that the
obligations of the Borrower to the Bank may at any time and from time to time
exceed the liability of the Guarantor hereunder without impairing this Guaranty.
The Guarantor and the Bank agree, as between themselves, that regardless of the
manner of application of payments made by the Borrower to the Bank, all such
payments shall be deemed to be applied first to the portion of the obligations
of the Borrower to the Bank which are not guaranteed hereunder and last to the
portion of such obligations which are guaranteed hereunder. The Liabilities
include, without limitation, interest accruing after the commencement of a
proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at
the Default Rate under the Note. This Guaranty is a guaranty of payment and not
of collection only. The Bank 


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shall not be required to exhaust any right or remedy or take any action against
the Borrower or any other person or entity or any collateral. The Guarantor
agrees that, as between the Guarantor and the Bank, the Liabilities may be
declared to be due and payable for the purposes of this Guaranty notwithstanding
any stay, injunction or other prohibition which may prevent, delay or vitiate
any declaration as regards the Borrower, and that in the event of a declaration
or attempted declaration, the Liabilities shall immediately become due and
payable by the Guarantor for the purposes of this Guaranty.

         Section 2. Guaranty Absolute. The Guarantor guarantees that the
Liabilities shall be paid strictly in accordance with the terms of the Facility.
The liability of the Guarantor under this Guaranty is absolute and unconditional
irrespective of: (a) any change in the time, manner or place of payment of or in
any other term of all or any of the Facility Documents or Liabilities, or any
other amendment or waiver of or any consent to departure from any of the terms
of any Facility Document or Liability; (b) any release or amendment or waiver of
or consent to departure from, any other guaranty or support document, or any
exchange, release or non-perfection of any collateral, for all or any of the
Facility Documents or Liabilities; (c) any present or future law, regulation or
order of any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any
Facility Document or Liability; (d) without being limited by the foregoing, any
lack of validity or enforceability of any Facility Document or Liability; and
(e) any other defense, setoff or counterclaim whatsoever with respect to the
Facility Documents or the transactions contemplated thereby which might
constitute a defense available to, or discharge of, the Borrower or a guarantor.

         Section 3. Guaranty Irrevocable. (a) This Guaranty is a continuing
guaranty of all Liabilities now or hereafter existing under the Facility and
shall remain in full force and effect until payment in full of all Liabilities
and other amounts payable under this Guaranty and until the Facility is no
longer in effect. (b) Anything herein to the contrary notwithstanding, this
Guaranty shall terminate on the date that the following conditions have been
met: (i) a minimum of $4,250,000 (plus accrued interest, fees and other charges
allocable thereto) shall have been paid to the Bank by the Borrower pursuant to
the Note; (ii) there shall have been no reduction in the compensation payable to
Marc P. Shore by the Guarantor from the arrangement represented to the Bank;
(iii) there shall exist no default or event of default under the Note; and (iv)
the unpaid principal amount of the Note shall not exceed 75% of the then fair
market value of the Mortgaged Premises, as evidenced by the Bank's appraisal of
the Mortgaged Premises.

         Section 4. Reinstatement. This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time 


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any payment of any of the Liabilities is rescinded or must otherwise be returned
by the Bank on the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though the payment had not been made.

         Section 5. Subrogation. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, by any payment made under this
Guaranty or otherwise, until all the Liabilities have been paid in full and the
Facility is no longer in effect. If any amount is paid to the Guarantor on
account of subrogation rights under this Guaranty at any time when all the
Liabilities have not been paid in full, the amount shall be held in trust for
the benefit of the Bank and shall be promptly paid to the Bank to be credited
and applied to the Liabilities, whether matured or unmatured or absolute or
contingent, in accordance with the terms of the Facility. If the Guarantor makes
payment to the Bank of all or any part of the Liabilities and all the
Liabilities are paid in full and the Facility is no longer in effect, the Bank
shall, at the Guarantor's request, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Liabilities resulting from the payment.

         Section 6. Subordination. Without limiting the Bank's rights under any
other agreement, any liabilities owed by the Borrower to the Guarantor in
connection with any extension of credit or financial accommodation by the
Guarantor to or for the account of the Borrower, including but not limited to
interest accruing at the agreed contract rate after the commencement of a
bankruptcy or similar proceeding, are hereby subordinated to the Liabilities,
and such liabilities of the Borrower to the Guarantor, if the Bank so requests,
shall be collected, enforced and received by the Guarantor as trustee for the
Bank and shall be paid over to the Bank on account of the Liabilities but
without reducing or affecting in any manner the liability of the Guarantor under
the other provisions of this Guaranty.

         Section 7. Payments Generally. All payments by the Guarantor shall be
made in the manner, at the place and in the currency (the "Payment Currency")
required by the Facility Documents.

         Section 8. Certain Taxes. The Guarantor further agrees that all
payments to be made hereunder shall be made without setoff or counterclaim and
free and clear of, and without deduction for, any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings or restrictions or conditions of
any nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed by any country or by any political subdivision or taxing authority
thereof or therein ("Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Bank hereunder, the amounts so payable to 


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the Bank shall be increased to the extent necessary to yield to the Bank (after
payment of all Taxes) the amounts payable hereunder in the full amounts so to be
paid. Whenever any Tax is paid by the Guarantor, as promptly as possible
thereafter, the Guarantor shall send the Bank an official receipt showing
payment thereof; together with such additional documentary evidence as may be
required from time to time by the Bank.

         Section 9. Representations and Warranties. The Guarantor represents and
warrants that this Guaranty: (a) has been authorized by all necessary action;
(b) does not violate any agreement, instrument, law, regulation or order
applicable to the Guarantor; (c) does not require the consent or approval of any
person or entity, including but not limited to any governmental authority, or
any filing or registration of any kind; and (d) is the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally.

         Section 10. Remedies Generally. The remedies provided in this Guaranty
are cumulative and not exclusive of any remedies provided by law.

         Section 11. Setoff. The Guarantor agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim the
Bank may otherwise have, the Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Guarantor at any of the Bank's offices, in U.S. dollars
or in any other currency, against any amount payable by the Guarantor under this
Guaranty which is not paid when due (regardless of whether such balances are
then due to the Guarantor), in which case it shall promptly notify the Guarantor
thereof; provided that the Bank's failure to give such notice shall not affect
the validity thereof.

         Section 12. Formalities. The Guarantor waives presentment, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Liability and any other formality with respect to any of the Liabilities or this
Guaranty.

         Section 13. Amendments and Waivers. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
therefrom, shall be effective unless it is in writing and signed by the Bank,
and then the waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the Bank
to exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right.


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         Section 14. Expenses. The Guarantor shall reimburse the Bank on demand
for all costs, expenses and charges (including without limitation fees and
charges of external legal counsel for the Bank and costs allocated by its
internal legal department) incurred by the Bank in connection with the
preparation, performance or enforcement of this Guaranty. The obligations of the
Guarantor under this Section shall survive the termination of this Guaranty.

         Section 15. Assignment. This Guaranty shall be binding on, and shall
inure to the benefit of the Guarantor, the Bank and their respective successors
and assigns; provided that the Guarantor may not assign or transfer its rights
or obligations under this Guaranty. Without limiting the generality of the
foregoing: the Bank may assign, sell participations in or otherwise transfer its
rights under the Facility to any other person or entity, and the other person or
entity shall then become vested with all the rights granted to the Bank in this
Guaranty or otherwise.

         Section 16. Captions. The headings and captions in this Guaranty are
for convenience only and shall not affect the interpretation or construction of
this Guaranty.

         Section 17. Governing Law, Etc. THIS GUARANTY SHALL BE GOVERNED BY THE
LAW OF THE STATE OF CONNECTICUT. THE GUARANTOR CONSENTS TO THE NONEXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF
CONNECTICUT. SERVICE OF PROCESS BY THE BANK IN CONNECTION WITH ANY SUCH DISPUTE
SHALL BE BINDING ON THE GUARANTOR IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT
THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME
TO TIME. THE GUARANTOR WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL IN
ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY
OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR
OTHERWISE), THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY.

         IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its duly authorized officer as of the date first above
written.

Shorewood Packaging Corporation


By:_________________________________________
   Howard Liebman, Executive Vice President,
   Chief Financial Officer


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Address: 277 Park Avenue, New York, New York 10172

STATE OF NEW YORK       ss.:     
COUNTY OF NEW YORK

On the ____ day of May, 1997, before me came Howard Liebman; that he/she is the
Executive Vice President of Shorewood Packaging Corporation, the corporation
described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by like order. 

_______________________________ 
Notary
Public My commission expires:


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