Document:

Amended and Restated Statement of Principal Terms and Conditions

 Exhibit 10.38 
 

 
 AMENDED AND RESTATED STATEMENT OF 
 PRINCIPAL TERMS AND CONDITIONS OF EMPLOYMENT 
 Melanie (Stubbing) Stack

 President, International 
 Location: Weight
Watchers, Millennium House, Ludlow Road, Maidenhead, SL6 2SL 
 27th February, 2009 
  

	1	Your employment will begin on 1st December, 2003 

  

	    	No previous period of employment counts towards your service with the Company. 

  

	    	Your employment is subject to a probationary period of 3 months. Satisfactory completion of the probationary period will be confirmed to you in writing. During your probationary
period your employment may be terminated by either you or the Company providing to the other 1 weeks notice in writing. 

  

	2	President, International 

  

	    	You are employed in the capacity mentioned above, effective as of August 1, 2008. You may also be required to perform such additional duties as the Company may from time to
time reasonably require. The Company also reserves the right in its reasonable discretion to change the area of your activities and responsibility and otherwise to change your working practices. 

  

	3	Hours of Work 

  

	 3.1
	 You will work a 35 3/4 hour week. The nature of the Company’s business is such that the Company may require you to work additional hours and you will work such additional hours as the Company shall from time to time reasonably
require. 

  

	    	You agree this may involve you working more than 48 hours per week. 

  

	3.2	All employees are entitled to two fifteen-minute tea breaks, one to be taken in the morning core period and the other one during the afternoon core period. Any other breaks taken
during the day will be treated as unpaid leave. 

  

	3.3	An unpaid lunch break of forty-five minutes must be taken each day if you work for more than 5 hours per day. 

	3.4	If you need to take time off during the day for medical appointments or for other personal reasons the time must be made up by you. 

  

	4	Location 

  

	4.1	Your normal place of employment is at the location set out at the head of this statement and such other places of business of the Company as the Company may from time to time
reasonably direct. 

  

	4.2	The Company reserves the right to change your location on reasonable prior notice. 

  

	5	Remuneration 

  

	5.1	You will be paid an annual salary of £220,000, which shall be deemed to accrue from day to day. 

  

	5.2	Your basic salary will be reviewed annually. There is no contractual entitlement to any increase in your basic salary but you will be notified in writing of any change to your
salary. 

  

	5.3	The Company operates a bonus scheme that enables you to receive an annual bonus that at target will be paid at a percentage of your base salary as determined by the Company from
time to time. 

  

	5.4	The bonus is at the discretion of the Company, which reserves the right to end or amend the scheme without notice at any time and to exclude you from participating in the scheme for
any reason. The scheme is dependent upon the Company’s profitability and the attainment by you of your objectives. 

  

	5.5	Only staff who are employed by the Company on the date at which the bonus is payable will be eligible to receive the bonus payment subject to clause 5.4. 

 

	5.6	Overtime payments will only be made subject to agreement with your Department Manager and the Head of Finance. No payments will be made if overtime is worked and this procedure has
not been met. 

  

	5.7	All full time employees whose salary exceeds £14,500 per annum or pro-rata for part timers will not be entitled to overtime payments. 

  

	 5.8
	 Your salary will be paid monthly by BACS to your nominated account on the 24th day of every month. If the 24th day shall fall on a Saturday or Sunday payment
will be made on the preceeding Friday. 

  

	5.9	You authorise the Company to deduct from any remuneration due to you, any overpayment of salary, expenses or payments made by mistake or through any misrepresentation of any debts
or other sums which require to be authorised under section 13 of the Employment Rights Act 1996. 

  

	6	Smoking 

  

	    	No smoking will be allowed at any of the Company’s premises unless a specifically designated area has been made available for this purpose. Failure to comply with this
condition may be regarded as gross misconduct and the Company reserves the right to terminate your employment in such case without notice or payment in lieu. 

  

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	7	Holidays 

  

	7.1	Your annual paid holiday entitlement is 27 days per annum. 

  

	7.2	Holidays will be taken in each holiday year as the Company shall agree having regard to the needs of the Company Business. 

  

	 7.3
	 The holiday year runs between 1 January and 31st December. 

  

	7.4	Not more than two consecutive weeks’ holiday may be taken at any one time or in any one period of three months unless previously authorised by your reporting Manager.

  

	7.5	Entitlement for people entering and leaving the Company’s service are calculated at the rate of 2.25 days per full month worked or 2.58 days per month for those with 5 or more
years continuous and consecutive service. 

  

	7.6	All holiday entitlement must be taken during the holiday year as no credits can be taken forward to the next year. 

  

	7.7	On leaving the employment of the Company any necessary payments for unused holiday or the claw back of excess holidays will be deducted in the final payment due to you.

  

	7.8	All holidays will be paid for the following statutory and bank holidays: 

 New Years Day – Good Friday – Easter Monday – May Day 
 Spring Bank Holiday – Summer
Bank Holiday – Christmas Day 
 Boxing Day. 
  

	8	Head Office Security 

  

	    	You should be aware that Head Office is a secure area, which requires use of a swipe-card. Any person making their swipe-card available to third parties or in any other way
breaching or compromising the security of the building will be regarded as having committed gross misconduct and the Company reserves the right to terminate their employment without delay or payment in lieu. Should you lose or mislay your swipe-card
its loss must be reported to the Property Department immediately. 

  

	9	Unpaid Leave 

  

	9.1	The Company does not encourage the taking of unpaid leave but recognises that circumstances arise from time to time, which may necessitate it. 

  

	9.2	The Company may at its sole discretion make available a total of not more than 5 days unpaid leave in any one-holiday year. 

  

	10	Compassionate Leave 

  

	    	The Company will permit employees to take compassionate leave in the event that the death of one of the following occurs: 

  

			
	Spouse or Child	  	5 days
	Mother or Father	  	 5 days if responsible for arrangements
 3 days if not
so responsible

	Sister, Brother or other close relative	  	1 day

  

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	11	Sickness 

  

	11.1	in the event of absence on account of sickness or injury you (or someone on your behalf) must inform the employer of the reason for your absence as soon as possible and must do so
no later than the end of the working day on which absence first occurs and keep in contact with the Company on a regular basis until you return to work. 

  

	11.2	In respect of an absence lasting seven days or fewer calendar days you are not required to produce a Medical Certificate unless requested by the Company but must complete the
Company’s self certification form on return to work from such absence. 

  

	11.3	In respect of an absence lasting more than seven calendar days you must on the eighth calendar day of absence provide the Company with a Medical Certificate stating the reason for
the absence and thereafter provide a like Certificate for each week to cover any subsequent period of absence. The Company reserves the right to ask you at any stage of absence to produce a Medical Certificate and/or to undergo a medical
examination. 

  

	11.4	You will be paid your normal basic remuneration (less the amount of any statutory sick pay or social security sickness benefit to which you may be entitled) for up to 10 days
certificated or uncertificated absence at the discretion of your Manager in total in any one sick pay year which runs from 1 January to 31 December. Entitlement to payment is subject to notification of absence and production of Medical
Certificates in accordance with paragraphs 11.1 to 11.3. 

  

	11.5	The Company operates a Statutory Sick Pay Scheme and you are required to co-operate in the maintenance of necessary records. For the purposes of calculating your entitlement to
statutory sick pay “qualifying days” are those on which you are normally required to work. Payments made to you by the Company under the sick pay scheme provisions in satisfaction of any other contractual entitlement will go towards
discharging the Company’s liability to make payments to you under the Statutory Sick Pay Scheme. 

  

	12	Pension Scheme 

  

	 12.1
	 The Company operates a contracted in contributory pension scheme, which is open to all employees, who are between the
ages of eighteen and fifty-nine, which they are able to join on the next anniversary date of scheme, if their starting date falls after the 1st
April. 

  

	12.2	The anniversary date of the Scheme is 1 April. 

  

	12.3	The terms and conditions of the pension scheme are available from the HR Advisor. 

  

	13	Private Medical Cover 

  

	13.1	In accordance with your offer letter you are eligible to join the Private Medical Cover Scheme. Details of which are available from the HR Advisor. The anniversary date of the
scheme is 1 January. 

  

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	14	Company Car 

  

	14.1	You are entitled to a Company car or a car allowance because of your seniority within the Company. 

  

	14.2	The grade of the car is dependent upon your level within the Organisation and the Company car scheme as published from time to time. 

  

	14.3	All cars are provided fully expensed by the Company 

  

	14.4	Company cars can only be driven by: 

  

	14.4.1	Persons aged 25 years and over and 

  

	14.4.2	Employees and their partners of the Company or persons engaged in the business of the Company. 

  

	14.5	The express previous consent of the Company is required before a car can be driven by any other person or for any other purpose. 

  

	14.6	if you are eligible for a Company Car, you agree that it is a condition of your employment to comply with all the rules related to Company cars from time to time published by the
Company. 

  

	15	Notice Period 

  

	15.1	You are entitled to terminate your employment by providing to the Company three months notice in writing. 

  

	15.2	You are entitled to receive 3 months’ notice in the event that the Company terminates your employment subject to clause 15.3 below. 

  

	15.3	The Company may at any time terminate your employment with immediate effect, without a payment in lieu of notice, if you are guilty of gross misconduct. Examples of conduct which
the Company may consider gross misconduct can be found in the Company’s disciplinary procedure. 

  

	15.4	The Company may suspend you from work pending any investigation into your conduct as the Company thinks fit. The Company shall continue to pay your salary and benefits during any
period of such a suspension. 

  

	15.5	Upon termination of your employment, you must immediately return to the Company any documents, credit cards, keys, computer, cards or any other item in your possession belonging to
or relating to the business of the Company. 

  

	15.6	The Company shall not be obliged to provide you with work at any time after notice has been given by either you or the Company and may require you to comply with such conditions as
it may specify in relation to attending at or remaining away from the place of business of the Company and/or assign you to other duties and/or withdraw any powers vested in you. 

  

	16	Grievance and disciplinary procedures 

  

	16.1	In the first instance you should refer any grievance to your immediate Manager: If the matter is not resolved at this stage then it should be referred to the HR Advisor.

  

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	16.2	Rules governing grievance and disciplinary procedures arc contained in the Company Handbook, which forms part of these terms and conditions. 

  

	17	Retirement 

  

	    	Normal retirement age is 60 years for all employees. 

  

	18	Whole time and attention 

  

	    	You may not during the continuance of your employment and without the previous written consent of the Company undertake or carry on either alone or in partnership or be directly
employed or concerned either as principle agent assistance servant or otherwise in any other business trade or profession other than that of the Company. 

  

	19	Confidentiality 

  

	19.1	During the course of your employment you may have access to gain knowledge of or be entrusted with information of a confidential nature. This may include but is not limited to
policy organisation research and development of a new programme future plans staffing of the Company customers clients suppliers manufacturers and the terms and conditions upon which they do business. 

  

	19.2	You will not at any time during or after the end of your employment with the Company or any Associate Company unless expressly authorised by the Company and in writing or as a
necessary part of the performance of your duties disclose to any person firm or Company any confidential information relating to the Company or its business or its activities. 

  

	19.3	If any such disclosure or misuse of information occurs during the course of your employment the Company may treat such conduct as gross misconduct and reserves the right to
terminate your employment without notice or payment in lieu. 

  

	20	Copyright 

  

	    	During your employment you may be involved in the design, development or other creation of material for the Company. All rights that arise from this work are passed over to the
Company, and to avoid confusion the Copyright, Designs and Patents Act 1988 shall apply to these matters. 

  

	21	Post Termination Restrictions 

  

	21.1	In order to protect legitimate business interest of the Company you agree that you will not during the period of six months following the termination of your employment for any
cause: 

  

	21.1.1	In competition with the business of the Company canvass solicit or endeavour to take away from the Company any business or any customers of the Company who have been customers at
any time during the 12 months immediately preceding the termination of your employment being business or customers with which you have been actively engaged or involved during the 12 months preceding the termination of your employment.

  

	21.1.2	In competition with the business of the Company solicit entice or induce any Key Employee to leave the employment of the Company [a Key Employee being any employee employed at
Management Grade], in any event, being an employee with whom you had day to day contact with during the 12 months preceding the termination of your employment. 

  

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	21.2	In order to protect the legitimate business interest of the Company you will agree that you will not during the period of 6 months following the termination of your employment
either alone or jointly with or as manager agent consultant or employee of any person firm or company directly or indirectly be engaged in any activity or business which will be in competition with the business of the Company [being the business of
the Company at the date of termination of your employment] in which you have been actively engaged or involved during the 12 months preceding the termination of your employment. 

  

	22	Data Protection 

  

	    	In order to keep and maintain accurate records relating to your employment, it will be necessary for the Company to record, keep and process personal data [including sensitive
personal data] relating to you. By accepting these terms and conditions of employment, you undertake and agree to the recording, processing, use, disclosure and transfer by the Company of personal data relating to you. This does not affect your
statutory rights under the Data Protection Act 1998. For the purposes of this act, the Company has nominated Sadhana Punj as its representative. 

  

	23	Security 

  

	    	You consent to the Company checking, recording and reviewing telephone calls, computer files, records and e-mails and any other compliance, security or risk analysis checks the
Company considers reasonably necessary. 

 I acknowledge receipt and accept my terms and conditions of employment as of the date set forth
above. 
  

			
	Signed:	 	 /s/    Melanie (Stubbing) Stack

  

 7Sixth Amendment to Amended and Restated Credit Agreement and Fourth Amendment

 Exhibit 10.1 
 SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND 
 FOURTH AMENDMENT TO AMENDED
AND RESTATED SECURITY AGREEMENT 
 THIS SIXTH AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT AND FOURTH AMENDMENT TO AMENDED AND RESTATED SECURITY AGREEMENT (this “Amendment”) is made and entered into this 26th day of February, 2009, by and among CARAUSTAR INDUSTRIES, INC., a North Carolina corporation (“Caraustar”), each subsidiary of Caraustar listed on the signature pages hereto as a
“Borrower” (Caraustar and each such subsidiary shall be referred to herein, collectively, as the “Borrowers” and each individually as a “Borrower”), each subsidiary of Caraustar listed on the signature
pages hereto as a “Guarantor” (each such subsidiary shall be referred to herein, collectively, as the “Guarantors” and each individually as a “Guarantor”), the financial institutions party to the Credit
Agreement (as defined below) from time to time as lenders (such financial institutions, together with their respective successors and assigns, shall be referred to herein, collectively, as “Lenders” and each individually as a
“Lender”), and BANK OF AMERICA, N.A., a national banking association, in its capacity as agent for the Lenders (together with its successors and assigns in such capacity, “Agent”). 
 Recitals: 
 The Borrowers, the
Guarantors, the Lenders and the Agent are parties to (i) that certain Amended and Restated Credit Agreement dated as of March 30, 2006 (as at any time amended, restated, modified or supplemented, the “Credit Agreement”),
pursuant to which the Agent and the Lenders have made certain revolving credit and term loans and other financial accommodations to the Borrowers, and (ii) that certain Amended and Restated Security Agreement dated as of March 30, 2006 (as
at any time amended, restated, modified or supplemented, the “Security Agreement”), pursuant to which the Borrowers and the Guarantors have granted to the Agent, for the benefit of the Lenders, a continuing Lien on the Collateral to
secure the Obligations. 
 The parties desire to amend the Credit Agreement and the Security Agreement as hereinafter set forth. 

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 
 1. Definitions. All
capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meanings ascribed to such terms in the Credit Agreement. 
 2. Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows: 
 (a) By deleting
Section 2.5 of the Credit Agreement in its entirety and by substituting in lieu thereof the following new Section 2.5: 
 2.5 Unused Line Fee. On the first day of each month, and on the Termination Date, the Borrowers agree to pay to the Agent, for the account of the Lenders, in accordance with their respective Pro Rata Shares, an unused
line fee (the “Unused Line Fee”) equal to 0.50% per annum times the Unused Line Amount for the month of February, 2009, and 0.75% per annum times the Unused Line Amount for each month thereafter. As used herein, the term
“Unused Line Amount” shall mean the amount by which the Maximum Revolver Amount exceeded the sum of the average daily outstanding amount of Revolving Loans and the average daily undrawn face amount of outstanding Letters of Credit
during the immediately preceding month or shorter period if calculated on the Termination Date. The Unused Line Fee shall be computed on the basis of a 360-day year for the actual 

 
number of days elapsed. For purposes of calculating the Unused Line Fee pursuant to this Section 2.5, all principal payments received by the
Agent which have been credited to the Borrowers’ Loan Account shall be deemed to be credited to the Borrowers’ Loan Account on the date that such credit actually occurs. 
 (b) By deleting clause (f) of Section 7.9 of the Credit Agreement and by substituting in lieu thereof the following new clause (f):

 (f) Reserved; and 
 (c) By deleting clause (c) of Section 7.14 of the Credit Agreement and by substituting in lieu thereof the following new clause (c): 
 (c) No later than April 30, 2009, the Borrowers shall provide the Agent (i) evidence of the repayment or redemption in full of
the Senior Notes (2009) through a Permitted Senior Note Refinancing or pursuant to Section 7.14(a)(iii) or of the defeasance of the Borrowers’ obligations under the covenants under the Senior Note Indenture (2009) in accordance
with the terms thereof or (ii) notice of the principal amount of the Senior Notes (2009) that remain or will remain outstanding on April 30, 2009, in which event the Agent may (and upon the written request of Required Lenders shall)
establish Reserves in an amount equal to the outstanding principal amount of the Senior Notes (2009), which Reserves will be released by the Agent on the date of any repayment or redemption in full of the Senior Notes (2009) (or defeasance of
the Borrowers’ obligations under the covenants under the Senior Note Indenture (2009)) permitted hereunder. 
 (d) By deleting
clause (a) of Section 8.2 of the Credit Agreement and by substituting in lieu thereof the following new clause (a): 
 (a) The following statements shall be true, and the acceptance by any Borrower of any extension of credit shall be deemed to be a statement to the effect set forth in clauses (i), (ii), (iii), and (iv) with
the same effect as the delivery to the Agent and the Lenders of a certificate signed by a Responsible Officer, dated the date of such extension of credit, stating that: 
 (i) The representations and warranties contained in this Agreement and the other Loan Documents are correct in all material respects on and as of the date of such extension of credit as though made on and as of such
date, other than any such representation or warranty which relates to a specified prior date and except to the extent the Agent and the Lenders have been notified in writing by the Obligors that any representation or warranty is not correct and the
Required Lenders have explicitly waived in writing compliance with such representation or warranty; and 
 (ii) No event has occurred and is
continuing, or would result from such extension of credit, which constitutes a Default or an Event of Default; and 
 (iii) No event has
occurred and is continuing, or would result from such extension of credit, which has had or could reasonably be expected to have a Material Adverse Effect; and 

 (iv) Obligors in the aggregate hold less than $1,000,000 in unrestricted cash or liquid investments.

 (e) By adding the following new definitions of “Federal Funds Rate”, “Prime Rate”, and “Sixth Amendment
Date” to Annex A to the Credit Agreement in proper alphabetical sequence: 
 “Federal Funds Rate”
means (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the
applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8
of 1%) charged to the Bank on the applicable day on such transactions, as determined by Agent. 
 “Prime
Rate” means the rate of interest announced by the Bank from time to time as its prime rate. Such rate is set by the Bank on the basis of various factors, including its costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate announced by the Bank shall take effect at the opening of business on the day specified in the public announcement of
such change. 
 “Sixth Amendment Date” means February 26, 2009. 
 (f) By deleting the definitions of “Applicable Margin,” “Average Availability”, “Base Rate”, “Letter of Credit
Subfacility”, “Maximum Revolver Amount”, “Permitted Distribution” and “Unused Letter of Credit Subfacility” contained in Annex A to the Credit Agreement and by substituting in lieu thereof the following new
definitions: 
 “Applicable Margin” means, from the Sixth Amendment Date until March 1, 2009:

 (i) with respect to Base Rate Revolving Loans and all other Obligations (other than LIBOR Revolving Loans), 4.00%;

 (ii) with respect to LIBOR Revolving Loans, 5.00%. 
 The “Applicable Margin” shall thereafter be adjusted (up or down) prospectively according to the pricing grid set forth below on the first day
of each calendar month (beginning on March 1, 2009), as determined on each such adjustment date by the Average Availability for the calendar month most recently ended: 
  

									
	 LEVEL
	 	 AVERAGE
 AVAILABILITY (measured
 for the fiscal month most
 recently ended)
	 	LIBOR
REVOLVING
LOANS	 	 	BASE RATE
REVOLVING
LOANS	 
	I	 	Less than $20 million	 	5.50	%	 	4.50	%
	II	 	Greater than or equal to $20 million	 	5.00	%	 	4.00	%

 If a Default or Event of Default has occurred and is continuing at the time any reduction in the
Applicable Margin is to be implemented, no reduction may occur until the first day of the first calendar month following the date on which such Default or Event of Default is waived or cured. 
 “Average Availability” means, (a) in the case of any calculation as of the last day of any fiscal quarter, the
average daily Availability during the fiscal quarter then ended, or (b) in the case of any calculation as of the last day of any other fiscal month for purposes of Section 7.4(b), the average daily Availability during the three fiscal
month period then ended, or (c) in the case of any calculation as of the last day of any other fiscal month for purposes of determining the Applicable Margin, the average daily Availability during the fiscal month then ended. 
 “Base Rate” means, for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day;
(b) the Federal Funds Rate for such day, plus 0.50%; or (c) the LIBOR Rate for a 30 day interest period as determined on such day, plus 1.0%. Each Interest Rate based upon the Base Rate shall be adjusted simultaneously with any change in
the Base Rate. 
 “Letter of Credit Subfacility” means $22,000,000. 
 “Maximum Revolver Amount” means $70,000,000, as reduced from time to time in accordance with Section 3.2(a).

 “Permitted Distributions” means Distributions by any Subsidiary of an Obligor to such Obligor.

 “Unused Letter of Credit Subfacility” means an amount equal to $22,000,000 minus the sum of
(a) the aggregate undrawn amount of all outstanding Letters of Credit plus, without duplication, (b) the aggregate unpaid reimbursement obligations with respect to all Letters of Credit. 
 (g) By deleting the lead-in clause at the beginning of the definition of “LIBOR Rate” contained in Annex A to the Credit Agreement, and
by substituting in lieu thereof the following new lead-in clause: 
 “LIBOR Rate” means, for any Interest
Period, with respect to LIBOR Rate Loans, the greater of (i) a rate of interest per annum equal to 2.0% or (ii) the rate of interest per annum determined pursuant to the following formula: 
 (h) By deleting clause (q) of the definition of “Restricted Investment” contained in Annex A to the Credit Agreement, and by adding the
word “and” immediately preceding clause (p) of such definition. 
 3. Amendments to Security Agreement. The
Security Agreement is hereby amended by deleting the definitions of “Dominion Date” contained in Section 1 of the Security Agreement and by substituting in lieu thereof the following new definition: 
 “Dominion Date” means April 30, 2009, on which date Agent shall, in accordance with the terms of each Blocked
Account Agreement, give notice to the applicable Clearing Bank that Agent is exercising dominion over the applicable Payment Account and that withdrawals by Grantors are no longer permitted from such Payment Account, provided that, Agent may
exercise such dominion prior to April 30, 2009 if, at any time prior to such date, (a) the unpaid balance of Revolving Loans is greater than $0 or (b) an Event of Default occurs. 

 4. Consent to Delivery of Audited Financial Statements for 2008 Fiscal Year Subject to Certain
Qualification. At the request of Borrowers, notwithstanding the requirement of Section 5.2(a) of the Credit Agreement that the financial statements to be delivered thereunder be accompanied by an unqualified report from Obligors’
independent certified public accountants, Agent and the Required Lenders hereby consent and agree that, in connection with the delivery by Borrowers to Agent and Lenders of such financial statements pursuant to Section 5.2(a) of the Credit
Agreement for the 2008 Fiscal Year, such statements, when delivered, shall be accompanied by a report thereon of independent certified public accountants selected by the Obligors and reasonably satisfactory to the Agent, which may be qualified as to
going concern, but only as a result of the requirement for payment upon maturity of the Senior Notes (2009) on June 1, 2009. 
 5. Ratification and Reaffirmation. Each Obligor hereby ratifies and reaffirms the Obligations, each of the Loan Documents and all of such Obligor’s covenants, duties, indebtedness and liabilities under the Loan Documents.

 6. Interest Rate Disclosure. The Base Rate on the date hereof is 3.25% per annum and, therefore, after giving effect to
the amendments set forth in this Amendment, the rate of interest in effect hereunder on the date hereof, expressed in simple interest terms, is 7.25% per annum with respect to any portion of the Revolving Loans bearing interest as a Base Rate
Loan. The 30-day LIBOR Rate on the date hereof is 2.00% per annum and, therefore, after giving effect to the amendments set forth in this Amendment, the rate of interest in effect hereunder on the date hereof, expressed in simple interest
terms, is 7.00% per annum with respect to any portion of the Revolving Loans bearing interest as a LIBOR Loan with a 30-day Interest Period. 
 7. Additional Covenants. To induce Agent and Lenders to enter into this Amendment, each of the Obligors hereby covenants and agrees to (a) execute and deliver, or cause to be executed and delivered, to the Agent, within
thirty (30) days after the date hereof (or such greater period as the Agent may otherwise agree in writing), such documents and agreements, and shall take or cause to be taken such actions, as the Agent may reasonably request, to properly
record and reflect of record with the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (i) Obligors’ title and ownership of all of their patents, trademarks and copyrights and other
Proprietary Rights, and (ii) Agent’s Liens with respect thereto, (b) use commercially reasonably efforts to promptly take or cause to be taken such other steps as are reasonably deemed necessary or desirable by Agent to maintain and
protect Agent’s first priority Liens in the Collateral, and (c) prepare and deliver to Agent on or before March 6, 2009 (or such later date as the Agent may otherwise agree in writing) updates to Schedules 6.11, 7.13, and 7.18 of the
Credit Agreement, Schedules I and II to the Security Agreement, and any other Schedules to the Credit Agreement and Security Agreement that Agent may request during such period, and to execute and deliver to Agent and Lenders any documents or
instruments necessary to amend the Credit Agreement and Security Agreement in order to give effect to any updating changes to the Schedules thereto, in each case in form and substance satisfactory to Agent. 
 8. Acknowledgments and Stipulations. Each Obligor acknowledges and stipulates that the Credit Agreement, the Security Agreement and the
other Loan Documents executed by such Obligor are legal, valid and binding obligations of such Obligor that are enforceable against such Obligor in accordance with the terms thereof; all of the Obligations are owing and payable without defense,
offset or counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date hereof, the same is hereby waived by such Obligor); the security interests and liens granted by such Obligor in favor of the Agent are duly
perfected, first priority security interests and Liens; and, on and as of the opening of business on February 23, 2009, the unpaid principal amount of the Revolving Loans and the face amount of all issued and outstanding Letters of Credit
totaled $15,705,940.50. 

 9. Representations and Warranties. Each Obligor represents and warrants to the Agent and
the Lenders, to induce Agent and each Lender to enter into this Amendment, that no Default or Event of Default exists on the date hereof; the execution, delivery and performance of this Amendment have been duly authorized by all requisite corporate
action on the part of such Obligor and this Amendment has been duly executed and delivered by such Obligor; and all of the representations and warranties made by such Obligor in the Credit Agreement and the Security Agreement are true and correct on
and as of the date hereof. 
 10. References to the Credit Agreement and the Security Agreement. Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment, and each reference in the Security
Agreement is to “this Agreement,” “hereunder,” or words of like import shall mean and be a reference to the Security Agreement, as amended by this Amendment. 
 11. Breach of Amendment. This Amendment constitutes a Loan Document, and a breach of any representation, warranty or covenant herein shall
have the consequences set forth in the Credit Agreement. 
 12. Conditions Precedent. The effectiveness of
the amendments contained in Sections 2 and 3 hereof are subject to the satisfaction of each of the following conditions precedent in a manner satisfactory to the Agent and the Required Lenders, unless satisfaction thereof is specifically waived in
writing by the Agent and each such Lender: 
 (a) The Agent shall have received a duly executed counterpart of this Amendment from each of the
Obligors and the Required Lenders; 
 (b) The Agent shall have received the Amendment Fee; and 
 (c) No Default or Event of Default shall be in existence. 
 13. Amendment Fee; Expenses of the Agent. In consideration of the willingness of Agent and the Required Lenders to enter into this amendment as set forth herein, Borrowers agree to pay to Agent, for the
benefit of those Lenders who are signatories hereto, a fee in the amount of $175,000 (the “Amendment Fee”) in immediately available funds on the date hereof. Each Lender that is a signatory hereto shall receive an amount equal to
its Allocated Share of the Amendment Fee. As used herein, “Allocated Share” shall mean, with respect to a Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such Lender’s Commitment and the
denominator of which is the sum of the amounts of the Commitments of all Lenders that are signatories hereto. Additionally, Borrowers agree to pay, on demand, all costs and expenses incurred by the Agent in connection with the preparation,
negotiation and execution of this Amendment and any other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the reasonable costs and fees of the Agent’s
legal counsel and any taxes or expenses associated with or incurred in connection with any instrument or agreement referred to herein or contemplated hereby. 
 14. Effectiveness; Governing Law. This Amendment shall be effective upon acceptance by the Agent and the Required Lenders (notice of which acceptance is hereby waived), whereupon the same shall be
governed by and construed in accordance with the internal laws of the State of Georgia. 
 15. Successors and Assigns. This
Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 

 16. No Novation, etc. Except as otherwise expressly provided in this Amendment, nothing
herein shall be deemed to amend or modify any provision of the Credit Agreement, the Security Agreement or any of the other Loan Documents, each of which shall remain in full force and effect. This Amendment is not intended to be, nor shall it be
construed to create, a novation or accord and satisfaction, and both the Credit Agreement and the Security Agreement, each as herein modified, shall continue in full force and effect. 
 17. Counterparts; Telecopied Signatures. This Amendment may be executed in any number of counterparts and by different parties to this
Amendment on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission or by email in
portable document format (PDF) shall be deemed to be an original signature hereto. 
 18. Further Assurances. Each Obligor
agrees to take such further actions as Agent shall reasonably request from time to time in connection herewith to evidence or give effect to the amendments set forth herein or any of the transactions contemplated hereby. 
 19. Section Titles. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto. 
 20. Release of Claims. To induce the Agent and the
Lenders to enter into this Amendment, each Obligor hereby releases, acquits and forever discharges the Agent and each Lender, and all officers, directors, agents, employees, successors and assigns of the Agent and each Lender, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any), whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown, that such Obligor now has or ever had against the
Agent or any Lender arising under or in connection with any of the Loan Documents or otherwise. Each Obligor represents and warrants to the Agent and the Lenders that such Obligor has not transferred or assigned to any Person any claim that such
Obligor ever had or claimed to have against the Agent or any Lender. 
 21. Waiver of Jury Trial. To the fullest extent
permitted by applicable law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or related to this Amendment. 
 [Remainder of page intentionally left blank.] 

 IN WITNESS WHEREOF, the parties have entered into this Amendment on the date first above written.

  

					
	BORROWERS	 	CARAUSTAR INDUSTRIES, INC.
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Senior Vice President
		
		 	CARAUSTAR CUSTOM PACKAGING GROUP, INC.
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CARAUSTAR RECOVERED FIBER GROUP, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CARAUSTAR MILL GROUP, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	SPRAGUE PAPERBOARD, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
	GUARANTORS	 	PBL INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	GYPSUM MGC, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President

							
		 	McQUEENEY GYPSUM COMPANY
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CARAUSTAR, G.P.
			
		 	By:	 	 CARAUSTAR INDUSTRIES, INC.,
 General
Partner

				
		 		 	By:	 	 /s/ Ronald J. Domanico

		 		 		 	 Ronald J. Domanico,
 Senior Vice
President

			
		 	By:	 	 CARAUSTAR INDUSTRIAL AND CONSUMER PRODUCTS GROUP, INC.,
 General Partner

				
		 		 	By:	 	 /s/ Ronald J. Domanico

		 		 		 	 Ronald J. Domanico,
 Vice
President

		
		 	McQUEENY GYPSUM COMPANY, LLC
			
		 	By:	 	 McQUEENEY GYPSUM COMPANY,
 Sole Member

				
		 		 	By:	 	 /s/ Ronald J. Domanico

		 		 		 	 Ronald J. Domanico,
 Vice
President

		
		 	RECCMG, LLC
			
		 	By:	 	 CARAUSTAR MILL GROUP, INC.,
 Sole Member

				
		 		 	By:	 	 /s/ Ronald J. Domanico

		 		 		 	 Ronald J. Domanico,
 Vice
President

		
		 	FEDERAL TRANSPORT, INC.
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President

							
		 	AUSTELL HOLDING COMPANY, LLC
			
		 	By:	 	 CARAUSTAR INDUSTRIES, INC.,
 Sole
Member

				
		 		 	By:	 	 /s/ Ronald J. Domanico

		 		 		 	 Ronald J. Domanico,
 Senior Vice
President

		
		 	CAMDEN PAPERBOARD CORPORATION
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CHICAGO PAPERBOARD CORPORATION 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	HALIFAX PAPER BOARD COMPANY, INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	CARAUSTAR CUSTOM PACKAGING GROUP (MARYLAND), INC. 
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President
		
		 	PARAGON PLASTICS, INC.
			
		 	By:	 	 /s/ Ronald J. Domanico

		 		 	Ronald J. Domanico, Vice President

 [Signatures continued on following page] 

					
	AGENT	 	BANK OF AMERICA, N.A., as Agent
			
		 	By:	 	 /s/ Walter T. Shellman

		 		 	Walter T. Shellman, Senior Vice President
		
	REQUIRED LENDERS	 	BANK OF AMERICA, N.A. 
			
		 	By:	 	 /s/ Walter T. Shellman

		 		 	Walter T. Shellman, Senior Vice President
		
		 	WELLS FARGO FOOTHILL, LLC
			
		 	By:	 	 /s/ Krista Wade

		 	Name:	 	Krista Wade
		 	Title:	 	Assistant Vice President
		
		 	GENERAL ELECTRIC CAPITAL CORPORATION 
			
		 	By:	 	 /s/ Robert A. Miller

		 	Name:	 	Robert A. Miller
		 	Title:	 	Authorized Signator
		
		 	JPMORGAN CHASE BANK, N.A.
			
		 	By:	 	 /s/ Jeff A. Tompkins

		 	Name:	 	Jeff A. Tompkins
		 	Title:	 	Vice President

  

 - 4 -

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