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                                                                   EXHIBIT 10.19


                                                           EXECUTION COUNTERPART


                               GUARANTY AGREEMENT


         This GUARANTY AGREEMENT (this "Guaranty"), dated as of July 30, 1999,
made by CARAUSTAR INDUSTRIES INC., a North Carolina corporation (the
"Guarantor"), in favor of SUNTRUST BANK, ATLANTA (the "Lender").

                              W I T N E S S E T H:

         WHEREAS, Premier Boxboard Limited LLC, a Delaware limited liability
corporation (the "Borrower") and Lender are parties to that certain Revolving
Credit Agreement dated as of the date hereof (as the same may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement).

         WHEREAS, Guarantor directly or indirectly owns fifty percent (50%) of
all membership interests of Borrower and the consummation of the transactions
pursuant to the Credit Agreement will inure to the benefit of Guarantor and its
subsidiaries; and

         WHEREAS, it is a condition precedent to Lender to make Loans to
Borrower under the Credit Agreement that Guarantor has executed and delivered
this Guaranty, and Guarantor desires to execute and deliver this Guaranty to
satisfy such condition precedent;

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender to make Loans to Borrower, Guarantor hereby agrees as follows:

         SECTION 1. GUARANTY. Guarantor hereby, irrevocably and unconditionally,
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of (i) fifty percent (50%) all Obligations owing by
Borrower to Lender under the Credit Agreement, the Notes, and all other Credit
Documents, including all renewals, extensions, modifications and refinancings
thereof, now or hereafter owing, whether for principal, interest, premiums,
fees, expenses or otherwise, (ii) any and all reasonable out-of-pocket expenses
(including reasonable attorneys' fees actually incurred and expenses) incurred
by Lender in enforcing any rights under this Guaranty and (iii) fifty percent
(50%) of any and all reasonable out-of-pocket expenses (including reasonable
attorneys' fees actually incurred and expenses) incurred by Lender in enforcing
any rights under any other Credit Document ((i), (ii) and (iii), collectively,
the "Guaranteed Obligations"), including without limitation, all interest which,
but for the filing of a petition in bankruptcy with respect to Borrower, would
accrue on any principal portion of the Guaranteed Obligations. Any and all
payments by Guarantor hereunder shall be made free and clear of and without
deduction for any set off, counterclaim, or withholding so that, in each case,
Lender will receive, after giving effect to any Taxes (but excluding Taxes to
the extent excluded pursuant to Section 3.07(b) of the Credit Agreement), the
full amount that it would otherwise be entitled to receive with respect to the
Guaranteed Obligations (but without



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duplication of amounts for Taxes already included in the Guaranteed
Obligations). Guarantor acknowledges and agrees that this is a guaranty of
payment when due, and not of collection, and that this Guaranty may be enforced
up to the full amount of the Guaranteed Obligations, without proceeding against
Borrower, against any security for the Guaranteed Obligations or under any other
guaranty of all or any portion of the Guaranteed Obligations or the Obligations,
including, without limitation, any guaranty from Inland Paperboard and
Packaging, Inc. In this connection, Guarantor hereby waives its right to take
action against Borrower as provided in Official Code of Georgia Annotated ss.
10-7-24.

         SECTION 2. GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Credit
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of Lender with
respect thereto. The liability of Guarantor under this Guaranty shall be
absolute and unconditional in accordance with its terms and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation, the following (whether or not
Guarantor consents thereto or has notice thereof):

                  (a) any change in the time, place or manner of payment of, or
         in any other term of, all or any of the Guaranteed Obligations, any
         waiver, indulgence, renewal, extension, amendment or modification of or
         addition, consent or supplement to or deletion from or any other action
         or inaction under or in respect of the Credit Documents, or any other
         documents, instruments or agreements relating to the Guaranteed
         Obligations or any other instrument or agreement referred to therein or
         any assignment or transfer of any thereof;

                  (b) any lack of validity or enforceability of the Credit
         Documents or any other document, instrument or agreement referred to
         therein or any assignment or transfer of any thereof;

                  (c) any furnishing to Lender of any additional security for
         the Guaranteed Obligations, or any sale, exchange, release or surrender
         of, or realization on, any security for the Guaranteed Obligations;

                  (d) any settlement or compromise of any of the Guaranteed
         Obligations, any security therefor, or any liability of any other party
         with respect to the Guaranteed Obligations, or any subordination of the
         payment of the Guaranteed Obligations to the payment of any other
         liability of Borrower;

                  (e) any bankruptcy, insolvency, reorganization, composition,
         adjustment, dissolution, liquidation or other like proceeding relating
         to Guarantor or Borrower, or any action taken with respect to this
         Guaranty by any trustee or receiver, or by any court, in any such
         proceeding;

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                  (f) any nonperfection of any security interest or lien on any
         collateral, or any amendment or waiver of or consent to departure from
         any guaranty or security, for all or any of the Guaranteed Obligations;

                  (g) any application of sums paid by Borrower or any other
         Person with respect to the liabilities of Borrower to Lender regardless
         of what liabilities of Borrower remain unpaid;

                  (h) any act or failure to act by Lender which may adversely
         affect Guarantor's subrogation rights, if any, against Borrower to
         recover payments made under this Guaranty; and

                  (i) any other circumstance which might otherwise constitute a
         defense available to, or a discharge of, Guarantor.

If claim is ever made upon Lender for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations,
and Lender repays all or part of said amount by reason of (a) any judgment,
decree or order of any court or administrative body having jurisdiction over
Lender or any of its property, or (b) any settlement or compromise of any such
claim effected by Lender with any such claimant (including Borrower or a trustee
in bankruptcy for Borrower), then and in such event Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding on it,
notwithstanding any revocation hereof or the cancellation of the Credit
Documents or any other instrument evidencing any liability of Borrower, and
Guarantor shall be and remain liable to Lender for the amounts so repaid or
recovered to the same extent as if such amount had never originally been paid to
Lender.

         SECTION 3. WAIVER. Guarantor hereby waives notice of acceptance of this
Guaranty, notice of any liability to which it may apply, and further waives
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by Lender against, and any
other notice to, Borrower or any other party liable with respect to the
Guaranteed Obligations (including any other Person executing a guaranty of the
obligations of Borrower).

         SECTION 4. POSTPONEMENT OF SUBROGATION. Guarantor subordinates and
agrees not to exercise any rights against Borrower which it may acquire by way
of subrogation or contribution, by any payment made hereunder or otherwise,
until all the Guaranteed Obligations shall have been irrevocably paid in full
and the Commitment shall have been irrevocably terminated. If any amount shall
be paid to any Guarantor on account of such subrogation or contribution rights
at any time when all the Guaranteed Obligations shall not have been paid in full
or the Commitment has not been terminated, such amount shall be held in trust
for the benefit of Lender and shall forthwith be paid to Lender to be credited
and applied to the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement.


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         SECTION 5. INDEMNITY AND SUBROGATION. For the purpose of establishing
certain rights and obligations among Borrower and Guarantor for the benefit of
themselves and for the benefit of Lender, Guarantor hereby agrees and Borrower
acknowledges the following indemnity and subrogation provisions:

         (a) Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as Guarantor may have under applicable law (but
subject to subsection (b) below), Borrower agrees that (i) in the event a
payment shall be made by Guarantor under this Guaranty in respect of the
obligations of Borrower under the terms of the Credit Agreement, Borrower shall
indemnify Guarantor for the full amount of such payment and (ii) in the event
any assets of Guarantor shall be sold by Lender to satisfy any Guaranteed
Obligation, Borrower shall indemnify Guarantor in an amount equal to the greater
of the book value or the fair market value of the assets so sold. Guarantor has
subordinated its rights to subrogation, pursuant to Section 4 of this Guaranty.

         (b) Subordination. Notwithstanding any provision of this Guaranty to
the contrary, (i) all rights of Guarantor under subsection (a) and all other
rights of indemnity or contribution under applicable law or otherwise shall be
fully subordinated to the indefeasible payment in full of the Guaranteed
Obligations, and (ii) no such rights shall be exercised until all of the
Guaranteed Obligations shall have been irrevocably paid in full and the
Commitment shall have been irrevocably terminated. If any amount shall be paid
to Guarantor on account of such indemnity or contribution rights at any time
when all of the Guaranteed Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of Lender and shall forthwith be
paid to Lender to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement. No failure on the part of Borrower or Guarantor to make the payments
required by subsection (a) (or any other payments required under applicable law
or otherwise) shall in any respect limit the obligations and liabilities of
Guarantor with respect to this Guaranty, and Guarantor shall remain liable for
the full amount of the obligations under this Guaranty.

         (c) Preservation of Rights. This Section 5 shall not limit or affect
any right which Guarantor may have against any other Person that is not a party
hereto.

         (d) Equitable Allocation. If as a result of any reorganization,
recapitalization or other corporate change in Borrower, or as a result of any
amendment, waiver or modification of the terms and conditions governing the
Guaranty or any of the Guaranteed Obligations, or for any other reason, the
obligations under this Section 5 become inequitable, the parties hereto shall
promptly modify and amend this Section 5 to provide for an equitable allocation
of obligations. All such modifications and amendments shall be in writing and
signed by all parties hereto.

         (e) Asset of Party to Which Contribution and Indemnification Are Owing.
The parties hereto acknowledge that the right to contribution and
indemnification hereunder shall each constitute an asset in favor of the party
to which such contribution or indemnification is owing.


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         SECTION 6. REPRESENTATIONS AND WARRANTIES.

         Guarantor represents and warrants as follows:

         SECTION 6.1. ORGANIZATIONAL EXISTENCE; COMPLIANCE WITH LAW. Guarantor
(i) is duly incorporated, validly existing, and in good standing under the laws
of the jurisdiction of its organization, (ii) has the corporate power and
authority and the legal right to own and operate its property and to conduct its
business, (iii) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership of property or the
conduct of its business requires such qualification, except where a failure to
be so qualified would not have a Materially Adverse Effect, and (iv) is in
compliance with all Requirements of Law except where the failure to be in
compliance would not have a Materially Adverse Effect.

         SECTION 6.2. CORPORATE POWER; AUTHORIZATION. Guarantor has the
corporate power and authority to make, deliver and perform the Credit Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, or filing with, any Person (including,
without limitation, any governmental authority) is required in connection with
the execution, delivery or performance by Guarantor, or the validity or
enforceability against Guarantor of the Credit Documents to which it is a party,
other than such consents, authorizations or filings which have been made or
obtained.

         SECTION 6.3. ENFORCEABLE OBLIGATIONS. This Guaranty has been duly
executed and delivered, and each other Credit Document to which Guarantor is a
party will be duly executed and delivered, by Guarantor, and this Guaranty
constitutes, and each such other Credit Document when executed and delivered by
the Guarantor will constitute, legal, valid and binding obligations of
Guarantor, enforceable against it in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.

         SECTION 6.4. NO LEGAL BAR. The execution, delivery and performance by
Guarantor of the Credit Documents to which it is a party will not violate any
Requirement of Law or cause a breach or default under any of its Contractual
Obligations to the extent that any such violation, breach or default would have
a Materially Adverse Effect.

         SECTION 6.5. NO MATERIAL LITIGATION. No litigation, investigations or
proceedings of or before any courts, tribunals, arbitrators or governmental
authorities are pending or, to the knowledge of Guarantor, threatened by or
against Guarantor or against any of its properties or revenues, existing or
future (a) with respect to any Credit Document to which it is a party, the
Contribution Agreement or the LLC Documents, or any of the transactions
contemplated hereby or thereby, or (b) which, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.

         SECTION 6.6. INVESTMENT COMPANY ACT, ETC. Guarantor is not an
"investment company" or a company "controlled" by an "investment company" (as
each of the


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quoted terms is defined or used in the Investment Company Act of 1940, as
amended). Guarantor is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, or any foreign, federal or
local statute or regulation limiting its ability to incur indebtedness for money
borrowed, guarantee such indebtedness, or pledge its assets to secure such
indebtedness, as contemplated hereby or by any other Credit Document.

         SECTION 6.7. COMPLIANCE WITH ENVIRONMENTAL LAWS.

         (a) Guarantor has received no notices of claims or potential liability
under, and is in compliance with, all applicable Environmental Laws, where such
claims and liabilities under, and failures to comply with, such statutes,
regulations, rules, ordinances, laws or licenses, would reasonably be expected
to result in penalties, fines, claims or other liabilities (including, without
limitation, remediation costs and expenses) to Guarantor in amounts which,
either individually or in the aggregate, would have a Materially Adverse Effect.

         (b) Guarantor has not received during the period from January 1, 1989
through the date of this Guaranty, any notice of violation, or notice of any
action, either judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or alleged violation
of any Environmental Law, including, without limitation, any notice of any
actual or alleged spill, leak, or other release of any Hazardous Substance,
waste or hazardous waste by Guarantor or its employees or agents, or as to the
existence of any contamination on any properties owned by Guarantor, where any
such violation, spill, leak, release or contamination would reasonably be
expected to result in penalties, fines, claims or other liabilities (including,
without limitation, remediation costs and expenses) which would have a
Materially Adverse Effect.

         (c) Guarantor has obtained all necessary governmental permits, licenses
and approvals which are material to the operations conducted on its properties,
including without limitation, all required permits, licenses and approvals for
(i) the emission of air pollutants or contaminates, (ii) the treatment or
pretreatment and discharge of waste water or storm water, (iii) the treatment,
storage, disposal or generation of hazardous wastes, (iv) the withdrawal and
usage of ground water or surface water, and (v) the disposal of solid wastes,
except where the failure to obtain such permits, licenses or approvals would not
have a Materially Adverse Effect.

         SECTION 6.8. INSURANCE. Guarantor currently maintains insurance with
respect to its properties and businesses, with insurers of recognized
responsibility, having coverages against losses or damages of the kinds
customarily insured against by reputable companies in the same or similar
businesses, such insurance being in amounts reasonably consistent with those
amounts which are customary for such companies under similar circumstances.

         SECTION 6.9. NO DEFAULT. Guarantor is not in default under or with
respect to any Contractual Obligation in any respect which has had or is
reasonably expected to have a Materially Adverse Effect.


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         SECTION 6.10. NO BURDENSOME RESTRICTIONS. Guarantor is not a party to
or bound by any Contractual Obligation or Requirement of Law which has had or
would reasonably be expected to have a Materially Adverse Effect.

         SECTION 6.11. TAXES. Guarantor has filed or caused to be filed all
material declarations, reports and tax returns which are required to have been
filed, and has paid all taxes, custom duties, levies, charges and similar
contributions ("taxes" in this Section 6.11) shown to be due and payable on said
returns or on any assessments made against it or its properties, and all other
taxes, fees or other charges imposed on it or any of its properties by any
governmental authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided in its
books); and no tax liens have been filed and, to the knowledge of Guarantor, no
claims are being asserted with respect to any such taxes, fees or other charges,
other than such liens or claims as would not be reasonably likely to have a
Materially Adverse Effect.

         SECTION 6.12. ERISA. Except as disclosed on Schedule 6.12 and except as
could not reasonably be expected to have a Materially Adverse Effect:

         (a) Compliance. Each Plan maintained by Guarantor has at all times been
maintained, by its terms and in operation, in compliance with all applicable
laws, and Guarantor is subject to no tax or penalty with respect to any Plan of
Guarantor or any ERISA Affiliate thereof, including without limitation, any tax
or penalty under Title I or Title IV of ERISA or under Chapter 43 of the Tax
Code, or any tax or penalty resulting from a loss of deduction under Sections
162, 404, or 419 of the Tax Code.

         (b) Liabilities. Guarantor is subject to no liabilities (including
withdrawal liabilities) with respect to any Plans of Guarantor or any of its
ERISA Affiliates, including without limitation, any liabilities arising from
Titles I or IV of ERISA, other than obligations to fund benefits under an
ongoing Plan and to pay current contributions, expenses and premiums with
respect to such Plans.

         (c) Funding. Guarantor and, with respect to any Plan which is subject
to Title IV of ERISA, each of its ERISA Affiliates, have made full and timely
payment of all amounts (A) required to be contributed under the terms of each
Plan and applicable law, and (B) required to be paid as expenses (including PBGC
or other premiums) of each Plan. No Plan subject to Title IV of ERISA has an
"amount of unfunded benefit liabilities" (as defined in Section 4001(a)(18) of
ERISA), determined as if such Plan terminated on any date on which this
representation and warranty is deemed made. Guarantor is subject to no
liabilities with respect to post-retirement medical benefits.

         SECTION 6.13. FINANCIAL CONDITION. After giving effect to the
transactions contemplated by this Guaranty, (i) assets of Guarantor, at fair
valuation and based on their present fair saleable value, will exceed
Guarantor's debts, including contingent liabilities, (ii) the remaining capital
of Guarantor will not be unreasonably small to conduct Guarantor's business, and
(iii) Guarantor will not have incurred debts, or have intended to incur debts,
beyond


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Guarantor's ability to pay such debts as they mature. For purposes of this
Section 6.15, "debt" means any liability on a claim, and "claim" means (a) the
right to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (b) the right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

         SECTION 6.14. YEAR 2000 ISSUES. Guarantor (i) has done a comprehensive
review of its computer programs to identify the systems that would be affected
by Year 2000 Issues as such Issues pertain to the computer programs and systems
of Guarantor, and has reviewed its Year 2000 exposure to its material third
party customers, suppliers and vendors, and has evaluated the costs of
modifications to program logic control systems, (ii) has developed a program for
remediating in all material respects all currently known Year 2000 Issues on a
timely basis as such Issues pertain to the computer programs and systems of
Guarantor, and (iii) based on its review, consultants' reports, and all other
information currently available to it, believes as of the date hereof that the
Year 2000 Issues will have not a Materially Adverse Effect.

         SECTION 6.15. DISCLOSURE. No representation or warranty contained in
this Guaranty (including the Schedules attached hereto) or in any other document
furnished from time to time pursuant to the terms of this Guaranty, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make the statements herein or therein not
misleading as of the date made or deemed to be made. Except as may be set forth
herein (including the Schedules attached hereto), there is no fact known to
Guarantor which has had, or is reasonably expected to have, a Materially Adverse
Effect. Guarantor represents and warrants as to itself that all representations
and warranties relating to it contained in the Credit Agreement are true and
correct.

         SECTION 7. AFFIRMATIVE COVENANTS.

         So long as any Commitment remains in effect under the Credit Agreement
or any Obligations remain unpaid or any Guaranteed Obligations remain
outstanding, Guarantor agrees to:

         SECTION 7.1. ORGANIZATIONAL EXISTENCE, ETC. Preserve and maintain its
corporate or other organizational existence, its material rights, franchises,
and licenses, and its material patents and copyrights (for the scheduled
duration thereof), trademarks, trade names, and service marks, necessary or
desirable in the normal conduct of its business, and its qualification to do
business as a foreign corporation in all jurisdictions where it conducts
business or other activities making such qualification necessary, where the
failure to be so qualified as a foreign corporation would reasonably be expected
to have a Materially Adverse Effect.

         SECTION 7.2. COMPLIANCE WITH LAWS, ETC. Comply with all Requirements of
Law (including, without limitation, the Environmental Laws) and Contractual
Obligations


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applicable to or binding on it where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be expected to
have a Materially Adverse Effect.

         SECTION 7.3. REPORTING COVENANTS.

         So long as any Commitment remains in effect under the Credit Agreement
or any Obligations remain unpaid or any Guaranteed Obligations remain
outstanding, Guarantor will furnish or cause to be furnished to the Lender:

         SECTION 7.3.1. FINANCIAL STATEMENTS AND PROJECTIONS.

         (a) Quarterly Financial Statements. As soon as practicable following
the filing of the Guarantor's quarterly report on Form 10-Q in respect of any
fiscal quarter, giving effect to any extensions granted to the Guarantor under
the Exchange Act or the rules promulgated thereunder by the SEC, and in any
event (or, if the Guarantor is not required to make any such filing), not later
than sixty (60) days after the end of each fiscal quarter, an unaudited
consolidated balance sheet of the Guarantor and its Subsidiaries as of the close
of such fiscal quarter and unaudited consolidated statements of income, retained
earnings and cash flows for the fiscal quarter then ended and that portion of
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures for the
preceding Fiscal Year and prepared by the Guarantor in accordance with GAAP
(subject to the absence of notes required by GAAP and subject to normal year-end
adjustments) and, if applicable, containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during the period.

         (b) Annual Financial Statements. As soon as practicable following the
filing of the Guarantor's annual report on Form 10-K in respect of any Fiscal
Year, giving effect to any extensions granted to the Guarantor under the
Exchange Act or the rules promulgated thereunder by the SEC and in any event
(or, if the Guarantor is not required to make any such filing), not later than
one hundred and twenty (120) days after the end of each Fiscal Year, an audited
consolidated balance sheet of the Guarantor and its Subsidiaries as of the close
of such Fiscal Year and audited consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year, together with the report
thereon of an independent certified public accounting firm reasonably acceptable
to the Lender in accordance with GAAP and, if applicable, containing disclosure
of the effect on the financial position or results of operations of any change
in the application of accounting principles and practices during the year, which
report is not qualified with respect to scope limitations imposed by the
Guarantor or any of its Subsidiaries or with respect to accounting principles
followed by the Guarantor or any of its Subsidiaries not in accordance with
GAAP.

         (c) Information Filed with the SEC. To the extent not delivered
pursuant to Section 7.1(a) or (b), promptly but in any event within ten (10)
Business Days after the filing thereof, a copy of (i) each report or other
filing made by the Guarantor or its Subsidiaries with the SEC and required by
the SEC to be delivered to the shareholders of the Guarantor (other than Form
11-K and Form 15 filed in connection with employee benefit plans), and (ii) each
report


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made by the Guarantor or any of its Subsidiaries to the SEC on Form 8-K and each
final registration statement (other than on Form S-8) of the Guarantor or any of
its Subsidiaries filed with the SEC.

         SECTION 7.3.2. OFFICER'S COMPLIANCE CERTIFICATE. At each time financial
statements are delivered pursuant to Section 7.3.1(a) or (b), a certificate of a
financial officer of the Guarantor in the form of Exhibit A attached hereto (an
"Officer's Compliance Certificate"):

         (a) stating that such officer has reviewed such financial statements
and such statements fairly present in all material respects the financial
condition of the Guarantor and its Subsidiaries as of the dates indicated and
the results of its operations and cash flows for the periods indicated;

         (b) stating that to such officer's knowledge, based on a reasonable
examination sufficient to enable him to make an informed statement, no Default
or Event of Default exists, or, if such is not the case, specifying such Default
or Event of Default and its nature, when it occurred, whether it is continuing
and the steps being taken by the Guarantor with respect to such Default or Event
of Default; and

         (c) setting forth as at the end of such fiscal quarter or Fiscal Year,
as the case may be, the calculations required to establish whether or not the
Guarantor and its Subsidiaries were in compliance with the financial covenants
set forth in Article 9 hereof as at the end of each respective period.

         SECTION 7.3.3. NOTICE OF LITIGATION AND OTHER MATTERS. Promptly (but in
no event later than ten (10) days after an officer of the Guarantor obtains
knowledge thereof), telephonic and written notice of:

         (a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Guarantor or any Subsidiary
thereof or any of their respective properties, assets or businesses which in any
such case could reasonably be expected to have a Material Adverse Effect;

         (b) any notice of any violation received by the Guarantor or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;

         (c) any Default or Event of Default or any default under the Caraustar
Credit Agreement;

         (d) any Reportable Event or "prohibited transaction", as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Employee Benefit Plan or any trust created thereunder which could reasonably
be expected to result in liability of the Guarantor or any ERISA Affiliate in an
aggregate amount exceeding $5,000,000, along with


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a description of the nature thereof, what action the Guarantor has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereof; and

         (e) any event which makes any of the representations set forth in
Section 6 inaccurate in any material respect.

         SECTION 8. FINANCIAL COVENANTS.

         So long as any Commitment remains in effect under the Credit Agreement
or any Obligations shall remain unpaid or any Guaranteed Obligations remain
outstanding, the Guarantor will not:

         (a) Leverage Ratio. Permit, as of any fiscal quarter end, the Leverage
Ratio to exceed 3.5 to 1.0.

         (b) Interest Coverage Ratio. Permit, as of any fiscal quarter end, the
Interest Coverage Ratio for such fiscal quarter to be less than 3.0 to 1.0.

         For purposes of this Guaranty, the terms "Leverage Ratio" and "Interest
Coverage Ratio" shall have the meanings ascribed to such terms as of the date
herewith in the Caraustar Credit Agreement.

         SECTION 9. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by Guarantor therefrom shall in any
event be effective unless the same shall be in writing executed by Lender.

         SECTION 10. SEVERABILITY. In case any provision in or obligation under
this Guaranty or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

         SECTION 11. NOTICES. All notices, requests and other communications to
Guarantor hereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to Guarantor at its
address or applicable teletransmission number set forth on the signature pages
hereof, or such other address or applicable teletransmission number as Guarantor
may hereafter specify by notice to Lender, at its address or applicable
teletransmission number set forth in the Guaranty, or such other address or
application teletransmission number as Lender, may hereafter specify by notice
to Guarantor. Each such notice, request or other communication shall be
effective (i) if given by mail, five days after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, (ii) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and the appropriate confirmation is received, or (iii)
if given by any other means (including, without limitation, by air courier),
when delivered or received at the address specified in this Section.


                                       11
<PAGE>

         SECTION 12. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of Lender in exercising any right or remedy hereunder, and no course of
dealing between Guarantor on the one hand and Lender on the other hand shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which Lender
would otherwise have. No notice to or demand on Guarantor in any case shall
entitle Guarantor to any other further notice or demand in any similar or other
circumstances or constitute a waiver of the rights of Lender to any other or
further action in any circumstances without notice or demand. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

         SECTION 13. RIGHT OF SET OFF. In addition to and not in limitation of
all rights of offset that Lender may have under applicable law, upon the
occurrence of any Event of Default and whether or not Lender has made any demand
or the Guaranteed Obligations are matured, have the right to appropriate and
apply to the payment of the Guaranteed Obligations, all deposits of Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by Lender to
Guarantor, whether or not related to this Guaranty or any transaction hereunder,
and whether or not the Guaranteed Obligations are payable in the same currency
as any such deposits, indebtedness or property.

         SECTION 14. TRANSFER OF OBLIGATIONS. This Guaranty shall (i) remain in
full force and effect until payment in full of the Guaranteed Obligations and
all other amounts payable under this Guaranty and termination of the Commitment,
(ii) be binding upon Guarantor, its successors and assigns, and (iii) inure to
the benefit of and be enforceable by Lender, and their respective successors and
assigns.

         SECTION 15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.

         (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE
OF GEORGIA.

         (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
OTHERWISE RELATED HERETO SHALL BE BROUGHT IN ANY COURT OF THE STATE OF GEORGIA
OR IN ANY COURT OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF
GEORGIA, EXCEPT TO THE EXTENT ANY SUCH COURT WILL NOT GRANT JURISDICTION OVER
GUARANTOR OR TO THE EXTENT LENDER IS ENFORCING ANY JUDGMENT AGAINST GUARANTOR IN
ANY OTHER JURISDICTION. BY EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, TO THE JURISDICTION OF THE


                                       12
<PAGE>

AFORESAID COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY, AND GUARANTOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.

         (c) Nothing herein shall affect the right of Lender to serve process in
any other manner permitted by law.

         SECTION 16. SUBORDINATION OF BORROWER'S OBLIGATIONS TO GUARANTOR.

         As an independent covenant, Guarantor hereby expressly covenants and
agrees for the benefit of Lender that all obligations and liabilities of
Borrower to Guarantor of whatsoever description including, without limitation,
all intercompany receivables of Guarantor from Borrower ("Junior Claims"), shall
be subordinate and junior in right of payment to all obligations of Borrower to
Lender under the terms of the Credit Documents ("Senior Claims").

         If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by Borrower to Guarantor on account of or in any manner
in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.

         In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by setoff or otherwise) shall be
made to Guarantor on account of or in any manner in respect of any Junior Claim
except such payments and distributions the proceeds of which shall be applied to
the payment of Senior Claims. For the purposes of the previous sentence,
"Proceeding" means Borrower or Guarantor shall commence a voluntary case
concerning itself under the Bankruptcy Code or any other applicable bankruptcy
laws; or any involuntary case is commenced against Borrower or Guarantor; or a
custodian (as defined in the Bankruptcy Code or any other applicable bankruptcy
laws) is appointed for, or takes charge of, all or any substantial part of the
property of Borrower or Guarantor, or Borrower or Guarantor commences any other
proceedings under any reorganization arrangement, adjustment of debt, relief of
debtor, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower or
Guarantor, or any such proceeding is commenced against Borrower or Guarantor, or
Borrower or Guarantor is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
Borrower or any Guarantor suffers any appointment of any custodian or the like
for it or any substantial part of its property; or Borrower or Guarantor makes a
general assignment for the benefit of creditors; or Borrower or Guarantor shall
fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or Borrower or Guarantor shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or Borrower or Guarantor shall by any act or failure to act indicate
its consent to, approval


                                       13
<PAGE>

of or acquiescence in any of the foregoing; or any corporate action shall be
taken by Borrower or Guarantor for the purpose of effecting any of the
foregoing.

         In the event any direct or indirect payment or distribution is made to
Guarantor in contravention of this Section 13, such payment or distribution
shall be deemed received in trust for the benefit of Lender and shall be
immediately paid over to Lender for application against the Guaranteed
Obligations in accordance with the terms of the Credit Agreement.

         Guarantor agrees to execute such additional documents as Lender may
reasonably request to evidence the subordination provided for in this Section
13.

         SECTION 17. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 8.07 of the Agreement,
all Guaranteed Obligations shall automatically become immediately due and
payable by Guarantor, without notice or other action on the part of Lender, and
regardless of whether payment of the Guaranteed Obligations by Borrower has then
been accelerated. In addition, if any event of the types described in Section
8.07 of the Agreement should occur with respect to Guarantor, then the
Guaranteed Obligations shall automatically become immediately due and payable by
Guarantor, without notice or other action on the part of Lender, and regardless
of whether payment of the Guaranteed Obligations by Borrower has then been
accelerated.

         SECTION 18. INFORMATION. Guarantor assumes all responsibility for being
and keeping itself informed of Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that Guarantor assumes
and incurs hereunder, and agrees that Lender will have no duty to advise
Guarantor of information known to it regarding such circumstances or risks.

         SECTION 19. SURVIVAL OF AGREEMENT. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guaranty, the Credit Documents, the making of the loans, and the execution and
delivery of the Notes and the other Credit Documents.

         SECTION 20. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.


                                       14
<PAGE>

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

                                            GUARANTOR:

Address for Notices:                        CARAUSTAR INDUSTRIES, INC.
-------------------

Caraustar Industries, Inc.
3100 Washington Street
Austell, Georgia 30106                      By:/s/ H. Lee Thrash, III
                                               ---------------------------------
Attention: Mr. Mike Pellicci                   Name:  H. Lee Thrash, III
Telecopier No.: (770) 732-3433                 Title:  Vice President


SECTION 5 and 16 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:


PREMIER BOXBOARD LIMITED LLC
BY:  PBL, INC., ITS MANAGER



By: [SIGNATURE ILLEGIBLE]
    --------------------------------
     Name:
     Title:

<PAGE>

                      FIRST AMENDMENT TO GUARANTY AGREEMENT

         This FIRST AMENDMENT TO GUARANTY AGREEMENT (this "First Amendment"),
dated as of September 29, 2000, is made and entered into by CARAUSTAR INDUSTRIES
INC., a North Carolina corporation (the "Guarantor") and SUNTRUST BANK, ATLANTA
(the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Guarantor executed that certain Guaranty Agreement, dated
as of July 30, 1999, in favor of the Lender (the "Guaranty Agreement"), pursuant
to which the Guarantor guaranteed 50% of the obligations of Premier Boxboard
Limited LLC, a Delaware limited liability corporation (the "Borrower"), under a
certain Revolving Credit Agreement dated as of July 30, 1999, as amended by that
certain First Amendment to Revolving Credit Agreement, dated as of June 27, 2000
(as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement).; and

         WHEREAS, the Guarantor has requested that the Lender amend the Leverage
Ratio (as defined in the Guaranty Agreement) in the manner set forth below, and
the Lender is willing to do so subject to the terms and conditions contained
herein.

         NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Guaranty Agreement and agree as follows:

         1. Section 8 of the Guaranty Agreement is hereby amended by replacing
subsection (a) and the last sentence of such Section in their entirety with the
following:

                    (a) Leverage Ratio. Permit (i) as of the fiscal quarters
         ended September 30, 2000 and December 31, 2000, the Leverage Ratio for
         each such fiscal quarter to exceed 4.0 to 1.0 and (ii) as of any other
         fiscal quarter, the Leverage Ratio for each such fiscal quarter to
         exceed 3.50 to 1.0.

                    For purposes of this Guaranty, the terms "Leverage Ratio"
         and "Interest Coverage Ratio" shall have the meanings ascribed to such
         terms as of September 29, 2000, after giving effect to Amendment No. 4
         to the Credit Agreement, dated as of September 29, 2000.

         2. The effectiveness of this First Amendment is conditioned upon the
Lender's receipt of (a) an amendment fee in the amount of $20,000 in immediately
available funds and (b) the duly executed original counterparts of the signature
pages to this First Amendment.

         3. In order to induce the Lender to enter into this First Amendment,
the Guarantor represents and warrants to the Lender that after giving effect to
this First Amendment, all



<PAGE>

representations and warranties set forth in Section 6 of the Guaranty Agreement
are true and correct.

         4. in all material respects and no default under the covenants
contained in Section 7 or 8 of the Guaranty Agreement has occurred and is
continuing. The Guarantor reaffirms and ratifies its obligations under the
Guaranty Agreement after giving effect to this First Amendment.

         5. Except as expressly provided herein, the Guaranty Agreement shall
continue in full force and effect, and the unamended terms and conditions of the
Guaranty Agreement are expressly incorporated herein and ratified and confirmed
in all respects. This First Amendment is not intended to be or to create, nor
shall it be construed as, a novation or an accord and satisfaction.

         6. From and after the date hereof, references to the Guaranty Agreement
shall be references to the Guaranty Agreement as amended hereby.

         7. This First Amendment constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. Neither this First
Amendment nor any provision hereof may be changed, waived, discharged, modified
or terminated orally, but only by an instrument in writing signed by the parties
required to be a party thereto pursuant to the Guaranty Agreement.

         8. THIS FIRST AMENDMENT SHALL BE GOVERNED IN ALL RESPECTS BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         9. This First Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same document, and shall be effective as
of the date first above written.

         10. Guarantor agrees to reimburse the Lender for the reasonable fees
and expenses of counsel for the Lender in connection with this First Amendment.


                                       2
<PAGE>

         IN WITNESS WHEREOF, Guarantor and the Lender have caused this First
Amendment to be executed as of the date first above written.


                                      GUARANTOR:

                                      CARAUSTAR INDUSTRIES, INC.


                                      By:/s/ H. Lee Thrash, III
                                         ---------------------------------
                                           Name: H. Lee Thrash, III
                                           Title:   Vice President


                                      SUNTRUST BANK, formerly known as
                                      SUNTRUST BANK, ATLANTA



                                      By: [SIGNATURE ILLEGIBLE]
                                          --------------------------------
                                            Name:
                                            Title:



                                       3
<PAGE>

                SECOND AMENDMENT AND WAIVER TO GUARANTY AGREEMENT

         This SECOND AMENDMENT AND WAIVER TO GUARANTY AGREEMENT (this
"Amendment"), dated as of March 12, 2001, is made and entered into by CARAUSTAR
INDUSTRIES INC., a North Carolina corporation (the "Guarantor") and SUNTRUST
BANK, formerly known as SunTrust Bank, Atlanta (the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Guarantor executed that certain Guaranty Agreement, dated
as of July 30, 1999, in favor of the Lender, as amended by that certain First
Amendment to Guaranty Agreement (as so amended, the "Guaranty Agreement"),
pursuant to which the Guarantor guaranteed 50% of the obligations of Premier
Boxboard Limited LLC, a Delaware limited liability corporation (the "Borrower"),
under a certain Amended and Restated Revolving Credit Agreement dated as of
December 18, 2000, as amended by that certain First Amendment to Revolving
Credit Agreement, dated as of the date hereof (as the same may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement); and

         WHEREAS, the Guarantor has requested that the Lender amend the
financial covenants and waive certain defaults in the manner set forth below,
and the Lender is willing to do so subject to the terms and conditions contained
herein;

         NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Guaranty Agreement and agree as follows:

         1. A new Section 7.4. is hereby added to the Guaranty Agreement as
follows:

         "Section 7.4. The Guarantor shall, by April 30, 2001 complete that
certain offering of $300 million of senior subordinated bonds, advice of which
has been communicated by Guarantor to Lender. If the requirement of this Section
7.4 is not met by Guarantor, an event of default shall exist hereunder."

         2. Section 8 of the Guaranty Agreement is hereby amended by deleting
such Section in its entirety and inserting in lieu thereof the following:

         "So long as any Commitment remains in effect under the Credit Agreement
or any Obligations remain outstanding, the Guarantor will not:

                  "(a) New Leverage Ratio. Permit its New Leverage Ratio to
         exceed, (i) beginning with the fiscal quarter ending June 30, 2001, and
         ending on the fiscal quarter ending December 31, 2001, 72.5%, (ii)
         beginning with the fiscal quarter ending March 31, 2002, and ending on
         the fiscal quarter ending September 30, 2002, 70%, (iii) beginning with
         the fiscal quarter ending December 31, 2002, and ending with the fiscal



<PAGE>

         quarter ending June 30, 2003, 68%, and (iv) beginning with the fiscal
         quarter ending September 30, 2003 and at the ending of each fiscal
         quarter thereafter, 66%.

                  (b) Interest Coverage Ratio. Permit the Interest Coverage
         Ratio to be less than, (i) beginning as of the fiscal quarter ending
         June 30, 2001, and ending on the fiscal quarter ending December 31,
         2001, 2.5:1, (ii) beginning as of the fiscal quarter ending March 31,
         2002 and ending on the fiscal quarter ending September 30, 2002,
         2.75:1, and (iii) as of the fiscal quarter ending December 31, 2002,
         and as of each fiscal quarter thereafter, 3:1.

                  (c) Minimum Tangible Net Worth. Allow its Tangible Net Worth
         to fall below (i) $109,735,000 plus (ii) 50% of net income (but not net
         losses) plus 100% of the proceeds of any equity issuances.

                  (d) Senior Leverage Ratio. Permit, as of the end of the fiscal
         quarters ended on or about March 31, 2002, June 30, 2002, September 30,
         2002, and December 31, 2002, its Senior Leverage Ratio to exceed 2.5:1,
         and for each quarter thereafter, permit its Senior Leverage Ratio to
         exceed 2.25:1. Should any of these covenants be changed in the $100
         million credit facility to be arranged by Bank of America, as Agent for
         lenders from time to time joining the facility, as contemplated by that
         certain term sheet attached to the Second Amendment to Guaranty, dated
         as of March 12, 2001, and such change is in a manner more favorable to
         the Lender, such changed covenants shall be deemed to be a part of this
         Amendment. For purposes of this Guaranty, the term "New Leverage Ratio"
         shall mean the ratio of (i) the total Indebtedness of the Guarantor to
         (ii) the sum of (x) all shareholders' equity of the Guarantor plus (y)
         total Indebtedness of the Guarantor (as used in this sentence the term
         "Indebtedness" shall have the meaning assigned to "Consolidated Debt
         for Borrowed Money" in the Caraustar Credit Agreement, as in effect as
         of the date hereof). The term "Interest Coverage Ratio" shall have the
         meaning set forth in the Caraustar Credit Agreement, as in effect as of
         the date hereof. The term "Tangible Net Worth" shall mean, as of any
         date, (i) the total assets of the Guarantor that would be reflected on
         the Guarantor's balance sheet as of such date prepared in accordance
         with GAAP minus the sum of (i) the total liabilities of the Guarantor,
         (ii) the amount of any write-up in excess of the cost of such assets
         acquired reflected on the balance sheet of the Guarantor as of such
         date prepared in accordance with GAAP and (iii) the net book amount of
         all assets of the Guarantor that would be classified as intangible
         assets on the balance sheet of the Guarantor in accordance with GAAP.
         The term "Senior Leverage Ratio" shall mean the ratio of Senior
         Indebtedness (as defined hereafter) to Consolidated EBITDA (as defined
         in the Caraustar Credit Agreement, as in effect as of the date hereof).
         "Senior Indebtedness" shall mean all "Consolidated Debt for Borrowed
         Money" (as defined in the Caraustar Credit Agreement, as in effect as
         of the date hereof) minus any subordinated Indebtedness, minus the
         amount by which the value of the Guarantor's cash and marketable
         securities exceeds $15 million."


                                       2
<PAGE>

         3. The effectiveness of this Amendment is conditioned upon the Lender's
receipt of (a) an advisory fee in the amount of $350,000 in immediately
available funds and (b) the duly executed original counterparts of this
Amendment.

         4. The following Section 21 is hereby added to the Guaranty Agreement:

         "Section 21. "Relevant Indebtedness" shall mean the indebtedness of the
Guarantor embodied in and evidenced by (i) the Caraustar Credit Agreement, (ii)
the senior notes of the Guarantor issued October 8, 1992, in an aggregate
principal amount of $82,750,000.00 and bearing an interest rate of 7.74% per
annum and (iii) the notes of the Guarantor issued June 1, 1999, in an aggregate
principal amount of $200,000,000.00 and bearing an interest rate of 7.375% per
annum, (iv) the notes of the Guarantor issued March, 2001 in the principal
amount of $300,000,000 and (v) the March 2001 Revolver."

         5. The following Section 22 is hereby added to the Guaranty Agreement:

         "Section 22. Agreement to Furnish Collateral. The Guarantor agrees that
at any time it, or any of its Subsidiaries, creates, incurs, assumes or suffers
to exist any Lien on any of its assets or property now owned or hereafter
acquired to secure the Relevant Indebtedness or to refinance, extend, renew, or
replace or substitute the Relevant Indebtedness, it will at such time ratably
incur a Lien or Liens in favor of the Lender."

         6. Waiver of Defaults. The Lender hereby waives any Default or Event of
Default now existing as a result of (i) the Guarantor's failure to comply with
Section 8(a) of the Guaranty Agreement (as in effect immediately prior to giving
effect to this Amendment) relating to the Leverage Ratio (the "Leverage Ratio
Requirement") as of December 31, 2000 and March 31, 2001 and (ii) any default or
event of default under other Indebtedness (including Guaranties) of the
Guarantor (a "cross-default"), which cross-default arises as a result of the
Guarantor's failure to comply with the Leverage Ratio Requirement in the
Guaranty Agreement or to comply under the terms of such other Indebtedness with
the same requirements contained in the Leverage Ratio Requirement.

         7. In order to induce the Lender to enter into this Amendment, the
Guarantor represents and warrants to the Lender that after giving effect to this
Amendment, all representations and warranties set forth in Section 6 of the
Guaranty Agreement are true and correct in all material respects and no default
under the covenants contained in Section 7 or 8 of the Guaranty Agreement has
occurred and is continuing. The Guarantor reaffirms and ratifies its obligations
under the Guaranty Agreement after giving effect to this Amendment.

         8. Except as expressly provided herein, the Guaranty Agreement shall
continue in full force and effect, and the unamended terms and conditions of the
Guaranty Agreement are expressly incorporated herein and ratified and confirmed
in all respects. This Amendment is not intended to be or to create, nor shall it
be construed as, a novation or an accord and satisfaction.

         9. From and after the date hereof, references to the Guaranty Agreement
shall be references to the Guaranty Agreement as amended hereby.


                                       3
<PAGE>

         10. This Amendment constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. Neither this Amendment nor any
provision hereof may be changed, waived, discharged, modified or terminated
orally, but only by an instrument in writing signed by the parties required to
be a party thereto pursuant to the Guaranty Agreement.

         11. THIS AMENDMENT SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         12. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together,
shall constitute one and the same document, and shall be effective as of the
date first above written.

         13. Guarantor agrees to reimburse the Lender for the reasonable fees
and expenses of counsel for the Lender in connection with this Amendment.

         IN WITNESS WHEREOF, Guarantor and the Lender have caused this Amendment
to be executed as of the date first above written.


                                          GUARANTOR:

                                          CARAUSTAR INDUSTRIES, INC.


                                          By: /s/ H. Lee Thrash, III
                                              -------------------------------
                                               Name: H. Lee Thrash, III
                                               Title:   Vice President


                                          SUNTRUST BANK, formerly known as
                                          SUNTRUST BANK, ATLANTA


                                          By: /s/ J. Christopher Deisley
                                              -------------------------------
                                               Name: J. Christopher Deisley
                                               Title:  Managing Director

<PAGE>

                THIRD AMENDMENT AND WAIVER TO GUARANTY AGREEMENT

         This THIRD AMENDMENT AND WAIVER TO GUARANTY AGREEMENT (this
"Amendment"), dated as of April 9, 2001, is made and entered into by CARAUSTAR
INDUSTRIES INC., a North Carolina corporation (the "Guarantor") and SUNTRUST
BANK, formerly known as SunTrust Bank, Atlanta (the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Guarantor executed that certain Guaranty Agreement, dated
as of July 30, 1999, in favor of the Lender, as amended by that certain First
Amendment to Guaranty Agreement and that certain Second Amendment to Guaranty
Agreement (as so amended, the "Guaranty Agreement"), pursuant to which the
Guarantor guaranteed 50% of the obligations of Premier Boxboard Limited LLC, a
Delaware limited liability corporation (the "Borrower"), under a certain Amended
and Restated Revolving Credit Agreement dated as of December 18, 2000, as
amended by that certain First Amendment to Revolving Credit Agreement, dated as
of March 12, (as the same may be further amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement); and

         WHEREAS, the Guarantor has requested that the Lender amend the Guaranty
Agreement in the manner set forth below, and the Lender is willing to do so
subject to the terms and conditions contained herein;

         NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Guaranty Agreement and agree as follows:

         1. Section 7.4. of the Guaranty Agreement is hereby deleted and the
following is inserted in lieu thereof:

         "Section 7.4. The Guarantor shall, by April 30, 2001 complete that
certain offering of $285 million of senior subordinated notes, due in the year
2011, and $29 million of senior notes, due in the year 2010, advice of which has
been communicated by Guarantor to Lender. If the requirement of this Section 7.4
is not met by Guarantor, an event of default shall exist hereunder."

         2. The effectiveness of this Amendment is conditioned upon the Lender's
receipt of duly executed original counterparts of this Amendment.

         3. The following Section 21 of the Guaranty Agreement is hereby deleted
and the following is inserted in lieu thereof:

         "Section 21. "Relevant Indebtedness" shall mean the indebtedness of the
Guarantor embodied in and evidenced by (i) the Caraustar Credit Agreement, (ii)
the senior notes of the Guarantor issued October 8, 1992, in an aggregate
principal amount of $82,750,000.00 and bearing an interest rate of 7.74% per
annum and (iii) the notes of the Guarantor issued June



<PAGE>

1, 1999, in an aggregate principal amount of $200,000,000.00 and bearing an
interest rate of 7.375% per annum, (iv) the senior subordinated notes of the
Guarantor, due in the year 2011, in the principal amount of $285,000,000, (v)
the senior Notes of the Guarantor, due in the year 2010, in the principal amount
of $29 million and (vi) the March 2001 Revolver."

         4. In order to induce the Lender to enter into this Amendment, the
Guarantor represents and warrants to the Lender that after giving effect to this
Amendment, all representations and warranties set forth in Section 6 of the
Guaranty Agreement are true and correct in all material respects and no default
under the covenants contained in Section 7 or 8 of the Guaranty Agreement has
occurred and is continuing. The Guarantor reaffirms and ratifies its obligations
under the Guaranty Agreement after giving effect to this Amendment.

         5. Except as expressly provided herein, the Guaranty Agreement shall
continue in full force and effect, and the unamended terms and conditions of the
Guaranty Agreement are expressly incorporated herein and ratified and confirmed
in all respects. This Amendment is not intended to be or to create, nor shall it
be construed as, a novation or an accord and satisfaction.

         6. From and after the date hereof, references to the Guaranty Agreement
shall be references to the Guaranty Agreement as amended hereby.

         7. This Amendment constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. Neither this Amendment nor any
provision hereof may be changed, waived, discharged, modified or terminated
orally, but only by an instrument in writing signed by the parties required to
be a party thereto pursuant to the Guaranty Agreement.

         8. THIS AMENDMENT SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         9. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together,
shall constitute one and the same document, and shall be effective as of the
date first above written.

         10. Guarantor agrees to reimburse the Lender for the reasonable fees
and expenses of counsel for the Lender in connection with this Amendment.


                                       2
<PAGE>


         IN WITNESS WHEREOF, Guarantor and the Lender have caused this Amendment
to be executed as of the date first above written.


                            GUARANTOR:

                            CARAUSTAR INDUSTRIES, INC.


                            By: /s/ H. Lee Thrash, III
                                ----------------------------------------------
                            Name: H. Lee Thrash, III
                            Title:  Vice President and Chief Financial Officer



                            SUNTRUST BANK, formerly known as
                            SUNTRUST BANK, ATLANTA


                            By: /s/ J. Christopher Deisley
                                ----------------------------------------------
                            Name: J. Christopher Deisley
                            Title: Managing Director

<PAGE>

                FOURTH AMENDMENT AND WAIVER TO GUARANTY AGREEMENT

         This FOURTH AMENDMENT AND WAIVER TO GUARANTY AGREEMENT (this
"Amendment"), dated as of January 18, 2002 (but with an effective date of
September 30, 2001, pursuant to Section 2 below), is made and entered into by
CARAUSTAR INDUSTRIES INC., a North Carolina corporation (the "Guarantor"), and
SUNTRUST BANK, formerly known as SunTrust Bank, Atlanta (the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Guarantor executed that certain Guaranty Agreement, dated
as of July 30, 1999, in favor of the Lender, as amended by that certain First
Amendment to Guaranty Agreement dated as of September 29, 2000, that certain
Second Amendment to Guaranty Agreement dated as of March 12, 2001, and that
certain Third Amendment to Guaranty Agreement dated as of April 9, 2001 (as so
amended, the "Guaranty Agreement"), pursuant to which the Guarantor guaranteed
50% of the obligations of Premier Boxboard Limited LLC, a Delaware limited
liability corporation (the "Borrower"), under a certain Amended and Restated
Revolving Credit Agreement dated as of December 18, 2000, as amended by that
certain First Amendment to Revolving Credit Agreement, dated as of March 12,
2001 (as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement); and

         WHEREAS, the Guarantor has requested that the Lender amend the Guaranty
Agreement in the manner set forth below, and the Lender is willing to do so
subject to the terms and conditions contained herein;

         NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Guaranty Agreement and agree as follows:

         1. Section 8(b) of the Guaranty Agreement is hereby deleted and the
following is inserted in lieu thereof:

                  "Section 8(b). Interest Coverage Ratio. Permit the Interest
         Coverage Ratio to be less than, (i) beginning as of the fiscal quarter
         ending March 31, 2001, and ending on the fiscal quarter ending
         September 30, 2001, 2.50:1.0, (ii) beginning as of the fiscal quarter
         ending December 31, 2001, and ending on the fiscal quarter ending March
         31, 2002, 2.25:1.0, (iii) as of the fiscal quarter ending June 30,
         2002, 2.50:1.0, (iv) as of the fiscal quarter ending September 30,
         2002, 2.75:1.0, and (v) as of the fiscal quarter ending December 31,
         2002 and as of each fiscal quarter thereafter, 3.00:1.0.

                  As used herein, the term "Interest Expense" shall have the
         meaning set forth in the Caraustar Credit Agreement, after giving
         effect to the Third Amendment to Credit Agreement, dated as of the date
         hereof, by and among the


<PAGE>

         Guarantor, the subsidiaries of the Guarantor specified therein, the
         Lenders specified therein, and Bank of America, N.A., as Administrative
         Agent."

         2. This Amendment shall be deemed effective as of September 30, 2001;
provided, that each of the following conditions precedent has been satisfied:

         (a) The Lender shall have received a duly executed original counterpart
of this Amendment; and

         (b) The Lender shall have received from the Guarantor an amendment fee
equal to $22,500.

         3. In order to induce the Lender to enter into this Amendment, the
Guarantor represents and warrants to the Lender that after giving effect to this
Amendment, all representations and warranties set forth in Section 6 of the
Guaranty Agreement are true and correct in all material respects and no default
under the covenants contained in Section 7 or 8 of the Guaranty Agreement has
occurred and is continuing. The Guarantor reaffirms and ratifies its obligations
under the Guaranty Agreement after giving effect to this Amendment.

         4. Except as expressly provided herein, the Guaranty Agreement shall
continue in full force and effect, and the unamended terms and conditions of the
Guaranty Agreement are expressly incorporated herein and ratified and confirmed
in all respects. This Amendment is not intended to be or to create, nor shall it
be construed as, a novation or an accord and satisfaction.

         5. From and after the date hereof, references to the Guaranty Agreement
shall be references to the Guaranty Agreement as amended hereby.

         6. This Amendment constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. Neither this Amendment nor any
provision hereof may be changed, waived, discharged, modified or terminated
orally, but only by an instrument in writing signed by the parties required to
be a party thereto pursuant to the Guaranty Agreement.

         7. THIS AMENDMENT SHALL BE GOVERNED IN ALL RESPECTS BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

         8. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together,
shall constitute one and the same document, and shall be effective as of the
date first above written.

         9. Guarantor agrees to reimburse the Lender for the reasonable fees and
expenses of counsel for the Lender in connection with this Amendment.


                                       2
<PAGE>


         IN WITNESS WHEREOF, Guarantor and the Lender have caused this Amendment
to be executed as of the date first above written.


                                GUARANTOR:

                                CARAUSTAR INDUSTRIES, INC.


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



                                SUNTRUST BANK, formerly known as
                                SUNTRUST BANK, ATLANTA


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