<PAGE>
                                                                  CONFORMED COPY



                                 THIRD AMENDMENT
                               TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 2, 2001, is by and among Gaylord Container Corporation, a Delaware
corporation (the "Borrower"), the financial institutions party to the Credit
Agreement (as defined below), in their capacities as lenders (collectively, the
"Lenders"), and Bankers Trust Company, as agent (the "Agent") for the Lenders.

                                   WITNESSETH:

     WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement dated as of June 19, 1998 (as heretofore and hereafter
amended, restated, supplemented or otherwise modified and in effect from time to
time, the "Credit Agreement"), pursuant to which the Lenders have provided to
the Borrower credit facilities and other financial accommodations; and

     WHEREAS, the Borrower has requested that the Agent and the Lenders amend
the Credit Agreement in certain respects as set forth herein and the Lenders and
the Agent are agreeable to the same, subject to the terms and conditions hereof;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, and other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

     1. Defined Terms. Terms capitalized herein and not otherwise defined herein
are used with the meanings ascribed to such terms in the Credit Agreement.

     2. Amendments to Credit Agreement. The Credit Agreement is, as of the
Effective Date (as defined below), hereby amended as follows:

          (a) Section 1.1 of the Credit Agreement is amended by inserting the
following new sentence at the end of the definition of "Consolidated EBITDA"
appearing in such Section:

          "For purposes of computing Consolidated Net Income or Consolidated Net
     Loss in determining Consolidated EBITDA of Borrower and its Subsidiaries,
     there shall be excluded from the computation thereof, without duplication
     and to the extent not otherwise excluded from the computation thereof,
     non-cash charges from the write-down of assets in Borrower's retail bag
     operations and three small paper machines at Borrower's Bogalusa, Louisiana
     mill not to exceed $21,000,000 in the aggregate in the fourth Fiscal
     Quarter of Fiscal Year 2001."

     3. Borrower's Representations and Warranties. In order to induce the Agent
and the Lenders to enter into this Amendment, the Borrower hereby represents and
warrants to the Agent and the Lenders, in each case after giving effect to this
Amendment, as follows:





<PAGE>

          (a) The Borrower has the right, power and capacity and has been duly
authorized and empowered by all requisite corporate and shareholder action to
enter into, execute, deliver and perform this Amendment and all agreements,
documents and instruments executed and delivered pursuant to this Amendment.

          (b) This Amendment constitutes the Borrower's legal, valid and binding
obligation, enforceable against it, except as enforcement thereof may be subject
to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law or otherwise).

          (c) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all material
respects at and as of the Effective Date as though made on and as of the
Effective Date (except to the extent specifically made with regard to a
particular date, in which case such representation and warranty is true and
correct in all material respects as of such earlier date).

          (d) The Borrower's execution, delivery and performance of this
Amendment do not and will not violate its Certificate of Incorporation or
By-laws, any law, rule, regulation, order, writ, judgment, decree or award
applicable to it or any contractual provision to which it is a party or to which
it or any of its property is subject.

          (e) No authorization or approval or other action by, and no notice to
or filing or registration with, any governmental authority or regulatory body
(other than those which have been obtained and are in force and effect) is
required in connection with its execution, delivery and performance of this
Amendment and all agreements, documents and instruments executed and delivered
pursuant to this Amendment.

          (f) No Event of Default or Unmatured Event of Default exists under the
Credit Agreement or would exist after giving effect to the transactions
contemplated by this Amendment.

     4. Conditions to Effectiveness of Amendment. This Amendment shall become
effective on the date (the "Effective Date") each of the following conditions
precedent is satisfied:

          (a) Execution and Delivery. The Borrower, the Agent, and the Required
Lenders shall have executed and delivered this Amendment.

          (b) No Defaults. No Unmatured Event of Default or Event of Default
under the Credit Agreement (as amended hereby) shall have occurred and be
continuing.

          (c) Representations and Warranties. After giving effect to the
amendments and consents contemplated by this Amendment, the representations and
warranties of the Borrower contained in this Amendment, the Credit Agreement and
the other Loan Documents shall be true and correct in all material respects as
of the Effective Date, with the same effect as though made on such date, except
to the extent that any such representation or warranty relates to an earlier



                                      -2-
<PAGE>

date, in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date.

          (d) Officer's Certificate. The Borrower shall have duly executed and
delivered to the Agent a certificate of a Responsible Officer of the Borrower
dated as of the Effective Date in the form of Exhibit A attached hereto.

          (e) Other Matters. The Agent shall have received such other
instruments and documents as the Agent or the Required Lenders may reasonably
request in connection with the execution of this Amendment, and all such
instruments and documents shall be reasonably satisfactory in form and substance
to the Agent.

     5. Miscellaneous. The parties hereto hereby further agree as follows:

          (a) Costs, Expenses and Taxes. The Borrower hereby agrees to pay all
reasonable fees, costs and expenses of the Agent incurred in connection with the
negotiation, preparation and execution of this Amendment and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
expenses of Winston & Strawn, counsel to the Agent.

          (b) Counterparts. This Amendment may be executed in one or more
counterparts, each of which, when executed and delivered, shall be deemed to be
an original and all of which counterparts, taken together, shall constitute but
one and the same document with the same force and effect as if the signatures of
all of the parties were on a single counterpart, and it shall not be necessary
in making proof of this Amendment to produce more than one (1) such counterpart.

          (c) Headings. Headings used in this Amendment are for convenience of
reference only and shall not affect the construction of this Amendment.

          (d) Integration. This Amendment and the Credit Agreement (as amended
hereby) constitute the entire agreement among the parties hereto with respect to
the subject matter hereof.

          (e) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF
NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES).

          (f) Binding Effect. This Amendment shall be binding upon and inure to
the benefit of and be enforceable by the Borrower, the Agent and the Lenders and
their respective successors and assigns. Except as expressly set forth to the
contrary herein, this Amendment shall not be construed so as to confer any right
or benefit upon any Person other than the Borrower, the Agent and the Lenders
and their respective successors and permitted assigns.

          (g) Amendment; Waiver. The parties hereto agree and acknowledge that
nothing contained in this Amendment in any manner or respect limits or
terminates any of the provisions of the Credit Agreement or any of the other
Loan Documents other than as expressly set forth herein and further agree and
acknowledge that the Credit Agreement (as amended hereby) and each of the other
Loan Documents remain and continue in full force and effect and are hereby



                                      -3-
<PAGE>

ratified and confirmed. Except to the extent expressly set forth herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any rights, power or remedy of the Lenders or the Agent under the
Credit Agreement or any other Loan Document, nor constitute a waiver of any
provision of the Credit Agreement or any other Loan Document. No delay on the
part of any Lender or the Agent in exercising any of their respective rights,
remedies, powers and privileges under the Credit Agreement or any of the Loan
Documents or partial or single exercise thereof, shall constitute a waiver
thereof. None of the terms and conditions of this Amendment may be changed,
waived, modified or varied in any manner, whatsoever, except in accordance with
Section 12.1 of the Credit Agreement.

                            [signature pages follow]












                                      -4-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.


                                        GAYLORD CONTAINER CORPORATION



                                        By:      /s/  Thomas M. Steffen
                                             -----------------------------------
                                        Name:    Thomas M. Steffen
                                        Title:   Assistant Treasurer


                                        BANKERS TRUST COMPANY, in its individual
                                                 capacity and as Agent


                                        By:      /s/  Robert Telesca
                                             -----------------------------------
                                        Name:    Robert Telesca
                                        Title:   Vice President









                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>





                                     BEAR STEARNS CORPORATE LENDING INC.



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






                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>





                                     BANK OF AMERICA, N.A.


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








                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                     FLEET NATIONAL BANK, N.A.


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










                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                   BLACK DIAMOND CLO 1998-1 LTD.
                                   By: Black Diamond Capital Management, L.L.C.,
                                           as Collateral Manager


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












                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                   BLACK DIAMOND CLO 2000-1 LTD.
                                   By: Black Diamond Capital Management, L.L.C.,
                                           as Collateral Manager


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







                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>


                                      MERITA BANK PLC


                                      By:    /s/  Michael J. Maher
                                           -------------------------------------
                                      Name:       Michael J. Maher
                                      Title:      Senior Vice President


                                      By:    /s/  Garry Weiss
                                           -------------------------------------
                                      Name:       Garry Weiss
                                      Title:      Vice President












                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                     EATON VANCE SENIOR INCOME TRUST
                                     By: Eaton Vance Management as Investment
                                            Advisor


                                     By:      /s/   Scott H. Page
                                          --------------------------------------
                                     Name:          Scott H. Page
                                     Title:         Vice President


                                     SENIOR DEBT PORTFOLIO
                                     By: Boston Management and Research as
                                            Investment Advisor


                                     By:      /s/   Scott H. Page
                                          --------------------------------------
                                     Name:           Scott H. Page
                                     Title:          Vice President


                                     GRAYSON & CO
                                     By: Boston Management and Research as
                                            Investment Advisor


                                     By:      /s/    Scott H. Page
                                          --------------------------------------
                                     Name:           Scott H. Page
                                     Title:          Vice President








                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>

                                    FIDELITY ADVISOR SERIES II: FIDELITY ADVISOR
                                       FLOATING RATE HIGH INCOME


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












                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>

                                     FLEET BUSINESS CREDIT CORPORATION


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















                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>

                                     FOOTHILL CAPITAL CORPORATION


                                     By:   /s/    Sean T. Dixon
                                          --------------------------------------
                                     Name:        Sean T. Dixon
                                     Title:       Vice President





                                     FOOTHILL INCOME TRUST II LP
                                     By:  FIT II GP LLC, its General Partner


                                     By:   /s/    Dennis R. Ascher
                                          --------------------------------------
                                     Name:        Dennis R. Ascher
                                     Title:       Managing Member






                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>


                                     FLEET NATIONAL BANK,
                                     as Trust Administrator for
                                     LONG LANE MASTER TRUST IV


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














                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>


                                     OAK HILL SECURITIES FUND, L.P.
                                     By: Oak Hill Securities GenPar II, L.P.,
                                         its General Partner
                                     By: Oak Hill Securities MGP, Inc., its
                                         General Partner


                                     By:      /s/    Scott D. Krase
                                          --------------------------------------
                                     Name:           Scott D. Krase
                                     Title:          Vice President


                                     OAK HILL SECURITIES FUND II, L.P.
                                     By: Oak Hill Securities GenPar II, L.P.,
                                         its General Partner
                                     By: Oak Hill Securities MGP, Inc., its
                                         General Partner


                                     By:      /s/    Scott D. Krase
                                          --------------------------------------
                                     Name:           Scott D. Krase
                                     Title:          Vice President






                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>



                                     PPM AMERICA SPECIAL INVESTMENTS FUND, LP


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












                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>

                                     SALOMON BROTHERS HOLDING COMPANY
                                     INCORPORATED


                                     By:    /s/   Pierre Batrouni
                                          --------------------------------------
                                     Name:        Pierre Batrouni
                                     Title:       Vice President
















                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>

                                     STEIN ROE & FARNHAM INCORPORATED,
                                        as agent for Keyport Life Insurance
                                        Company


                                     By:    /s/   James R. Fellows
                                          --------------------------------------
                                     Name:        James R. Fellows
                                     Title:       Senior Vice President &
                                                  Portfolio Manager








                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>

                                     STEIN ROE FLOATING RATE LIMITED
                                     LIABILITY COMPANY


                                     By:   /s/  James R. Fellows
                                         ---------------------------------------
                                     Name:      James R. Fellows
                                     Title:     Senior Vice President
                                            Stein Roe & Farnham Incorporated,
                                            as Advisor to the Stein Roe Floating
                                            Rate Limited Liability Company


                                     SRF TRADING, INC.


                                     By:   /s/  Ann E. Morris
                                         ---------------------------------------
                                     Name:      Ann E. Morris
                                     Title:     Assistant Vice President


                                     LIBERTY-STEIN ROE ADVISOR FLOATING RATE
                                        ADVANTAGE FUND, by Stein Roe & Farnham
                                        Incorporated As Advisor


                                     By:   /s/  James R. Fellows
                                         ---------------------------------------
                                     Name:      James R. Fellows
                                     Title:     Senior Vice President &
                                                Portfolio Manager







                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT


<PAGE>

                                     TRANSAMERICA BUSINESS CREDIT CORPORATION
                                     (as successor to Transamerica Business
                                     Credit Corporation)


                                     By:   /s/  Steve Goetschius
                                         ---------------------------------------
                                     Name:      Steve Goetschius
                                     Title:     Senior Vice President








                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                     WINDSOR LOAN FUNDING, LIMITED
                                     By:  Stanfield Capital Partners LLC
                                     As its Investment Manager

                                     By:   /s/  Christopher A. Bondy
                                        ----------------------------------------
                                     Name:      Christopher A. Bondy
                                     Title:     Partner







                          GAYLORD CONTAINER CORPORATION
                       THIRD AMENDMENT TO CREDIT AGREEMENT

<PAGE>
                                    EXHIBIT A

                              OFFICER'S CERTIFICATE


          The undersigned, Thomas M. Steffen, hereby certifies that he is the
duly elected Assistant Treasurer of Gaylord Container Corporation, a Delaware
corporation (the "Borrower"), and pursuant to that certain Third Amendment to
Credit Agreement dated as of October __, 2001 (the Amendment") by and among the
Borrower, Bankers Trust Company, as Agent, and the financial institutions party
thereto as lenders (capitalized terms used herein shall, unless otherwise
defined herein, have the meaning provided in the Amendment), hereby further
certifies as follows:

          1. No Unmatured Event of Default or Event of Default under the Credit
Agreement (as amended by the Amendment) has occurred and is continuing as of the
date hereof.

          2. After giving effect to the Amendment, the representations and
warranties of the Borrower contained in the Amendment, the Credit Agreement and
the other Loan Documents are true and correct in all material respects as of the
date hereof, with the same effect as though made on such date, except to the
extent that any such representation or warranty relates to an earlier date, in
which case such representation or warranty is true and correct in all material
respects as of such earlier date.

          3. The conditions of Section 4 of the Amendment have been fully
satisfied.

          IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
duly executed and delivered as of October __, 2001.

                                              GAYLORD CONTAINER CORPORATION




                                              By:
                                                 -------------------------------
                                                    Thomas M. Steffen
                                                    Assistant Treasurer