Document:

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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<PAGE>
                          SECOND AMENDED AND RESTATED
                                PARENT GUARANTY

                           Caraustar Industries, Inc.

                              As of August 1, 1999

              WHEREAS, Standard Gypsum L.L.C., a Texas limited liability
company (the "Borrower"), the financial institutions whose names appear as
lenders on the signature pages to the Loan Agreement (as defined below)
(together with any other financial institution which subsequently becomes a
"Lender" under the Loan Agreement, as such term is hereinafter defined, the
"Lenders"), and Toronto Dominion (Texas), Inc. as administrative agent for the
Lenders (the "Administrative Agent"), previously executed and delivered a Loan
Agreement dated as of April 30, 1998, pursuant to which the Lenders agreed to
make loans and extend credit in connection with letters of credit in an
aggregate principal amount not to exceed $61,000,000 in commitments to the
Borrower; and

              WHEREAS, the Borrower, the Administrative Agent, and the Lenders
amended and restated the Loan Agreement referred to above on May 1, 1999 to
provide for the Lenders to make loans and extend credit to the Borrower in an
aggregate principal amount not to exceed $15,000,000 in Commitments to the
Borrower, as evidenced by certain promissory notes issued by the Borrower to
each of the Lenders; and

              WHEREAS, in connection therewith, an affiliate of the
Administrative Agent issued for the account of the Borrower a letter of credit
in the aggregate original face amount of $46,643,014 (the "First Letter of
Credit"), pursuant to a Reimbursement Agreement (the "First Reimbursement
Agreement") dated as of May 1, 1999 between the Borrower and the issuer of the
Letter of Credit (the "Issuing Bank"); and

              WHEREAS, the Borrower, the Administrative Agent, and the Lenders
have agreed to amend and restate the Loan Agreement referred to above (as
amended and restated, the "Loan Agreement") to provide for the Lenders to make
loans and extend credit to the Borrower in an aggregate principal amount not to
exceed $5,000,000 in Commitments (the "Loans") to the Borrower, as evidenced by
certain promissory notes issued by the Borrower to each of the Lenders (as
executed on the date hereof and as such notes may be amended, modified,
extended, reissued, or renewed from time to time, the "Notes"); and

<PAGE>

              WHEREAS, in connection therewith, the Borrower has asked an
affiliate of the Administrative Agent to issue for the account of the Borrower
another Letter of Credit in the aggregate original face amount of $10,095,891
(the "Second Letter of Credit" and, collectively with the First Letter of
Credit, the "Letter of Credit"), pursuant to a Reimbursement Agreement (the
"Second Reimbursement Agreement" and, collectively with the First Reimbursement
Agreement, the "Reimbursement Agreement") of even date between the Borrower and
issuer of the Letter of Credit (the "Issuing Bank"); and

              WHEREAS, Toronto Dominion (Texas), Inc. has agreed to act as
Administrative Agent for itself and for the ratable benefit of the Lenders and
the Issuing Bank (as defined in the Loan Agreement) in connection with the
transactions contemplated by the Loan Agreement and the Reimbursement
Agreement; and

              WHEREAS, the Borrower is a fifty percent (50%) Subsidiary of the
undersigned; and

              WHEREAS, the undersigned (the "Guarantor"), has determined that
its execution, delivery and performance of this Guaranty directly benefit, and
are within the corporate purposes and in the best interests of, the Guarantor;
and

              WHEREAS, as a condition to the Lenders' extending the Loans, and
as a condition to the issuance of the Letter of Credit pursuant to the
Reimbursement Agreement, the Guarantor has agreed to execute this Guaranty (the
"Guaranty") guaranteeing the payment and performance by the Borrower of fifty
percent (50%) of the obligations and covenants of the Borrower under the Notes,
the Loan Agreement, the Reimbursement Agreement, and the other Loan Documents
(the Loan Agreement, the Notes, the Reimbursement Agreement, and the other Loan
Documents as executed on the date hereof and as amended, modified or extended
from time to time being hereinafter referred to as the "Guaranteed
Agreements"); and

              WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the meanings given to them in the Loan Agreement;

              NOW, THEREFORE, for and in consideration of the above premises,
Ten Dollars ($10.00) in hand paid and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Guarantor
hereby

<PAGE>

guarantees to the Administrative Agent, the Issuing Bank and the Lenders: (a)
full and prompt payment and performance of 50% of all obligations of the
Borrower to the Administrative Agent, the Lenders and the Issuing Bank, or any
of them, under the Loan Agreement, the Notes, the Reimbursement Agreement, and
the other Loan Documents (including, without limitation, any Interest Hedge
Agreements between the Borrower, on the one hand, and the Administrative Agent
and the Lenders, or any of them, on the other hand, any interest, fees and
other charges in respect of the Notes or the other Loan Documents that would
accrue but for the filing of a bankruptcy action with respect to the Borrower,
whether or not such claim is allowed in such bankruptcy action), as amended
from time to time, or as a result of making the Loans or issuing the Letter of
Credit; (b) payment of 50% of any and all damage which the Administrative
Agent, the Lenders, the Issuing Bank, or any of them, may suffer by reason of a
breach of any obligation, covenant or undertaking with respect to this
Agreement, the Loan Agreement, the Notes, the Reimbursement Agreement, or any
other Loan Document by the Borrower or any other obligor thereunder; and (c)
payment and performance of 50% of all of the obligations of any obligor to the
Administrative Agent, the Lenders, the Issuing Bank, or any of them, under this
Agreement, the Loan Agreement, the Reimbursement Agreement, and the other Loan
Documents, or as a result of making the Loans or issuing the Letter of Credit;
and any extensions, renewals or amendments of any of the foregoing, including
any interest thereon, plus reasonable attorneys' fees and expenses if the
obligations represented by this Guaranty are collected by law, through an
attorney-at-law, or under advice therefrom (all of the foregoing obligations
(a), (b), and (c) being hereinafter collectively referred to as the
"Obligations"); subject only to the limitation contained in the last sentence
of this paragraph. Each Obligation shall rank pari passu with each other
Obligation. Notwithstanding anything contained herein to the contrary, the
Guarantor's obligations hereunder shall be satisfied by the indefeasible
payment in full, in cash, of fifty percent (50%) of the entire amount of the
Obligations.

              The Guarantor and the Administrative Agent hereby further agree
that:

              1. Regardless of whether any proposed guarantor or any other
Person or Persons is or are or shall become in any other way responsible to the
Administrative Agent, the Lenders and the Issuing Bank, or any of them, for or
in respect of the Obligations or any part thereof, and regardless of whether or
not any Person or Persons now or hereafter responsible to the Administrative
Agent, the

<PAGE>

Lenders and the Issuing Bank, or any of them, for the Obligations or any part
thereof, whether under this Guaranty or otherwise, shall cease to be so liable,
the Guarantor hereby declares and agrees that this Guaranty shall be a several
obligation, and shall be operative and binding, and that the Guarantor shall
have no right of subrogation with respect to this Guaranty.

              2. Upon this Guaranty's being executed and coming into the hands
of the Administrative Agent, this Guaranty shall be deemed to be finally
executed and delivered by the Guarantor and, except as set forth herein, shall
not be subject to or affected by any promise or condition affecting or limiting
the Guarantor's liability, and no statement, representation, agreement or
promise on the part of the Administrative Agent, the Lenders, the Issuing Bank,
the Borrower, or any of them, or any officer, employee or agent thereof, unless
contained herein forms any part of this Guaranty or has induced the making
hereof or shall be deemed in any way to affect the Guarantor's liability
hereunder.

              3. No alteration or waiver of this Guaranty or of any of its
terms, provisions or conditions shall be binding upon the parties against whom
enforcement is sought unless made in writing and signed by an authorized
officer of such party.

              4. The Administrative Agent, the Lenders and the Issuing Bank, or
any of them, may from time to time, without exonerating or releasing the
Guarantor in any way under this Guaranty, (a) take such further or other
security or securities for the Obligations or any part thereof as the
Administrative Agent, the Lenders and the Issuing Bank, or any of them, may
deem proper, or (b) release, discharge, abandon or otherwise deal with or fail
to deal with any guarantor of the Obligations or any security or securities
therefor or any part thereof now or hereafter held by the Administrative Agent,
the Lenders and the Issuing Bank, or any of them, or (c) amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Guaranteed Agreements, all as the Administrative Agent, the Lenders and
the Issuing Bank, or any of them, may consider expedient or appropriate in
their sole discretion. Without limiting the generality of the foregoing, or of
Section 5 hereof, it is understood that the Administrative Agent, the Lenders
and the Issuing Bank, or any of them, may, without exonerating or releasing the
Guarantor, give up, or modify or abstain from perfecting or taking advantage of
any security for the Obligations and accept or make any compositions or
arrangements, and realize upon any security for the Obligations when, and in
such

<PAGE>

manner, as the Administrative Agent, the Lenders and the Issuing Bank, or any
of them, may deem expedient, all without notice to the Guarantor.

              5. The Guarantor acknowledges and agrees that no change in the
nature or terms of the Obligations or any of the Guaranteed Agreements, or
other agreements, instruments or contracts evidencing, related to or attendant
with the Obligations (including any novation), shall discharge all or any part
of the liabilities and obligations of the Guarantor pursuant to this Guaranty;
it being the purpose and intent of the Guarantor, the Administrative Agent, the
Lenders and the Issuing Bank that the covenants, agreements and all liabilities
and obligations of the Guarantor hereunder are absolute and unconditional.
Without limiting the generality of the foregoing, the Guarantor agrees that
until each and every one of the covenants and agreements of this Guaranty is
fully performed, the Guarantor's undertakings hereunder shall not be released,
in whole or in part, by any action or thing which might, but for this paragraph
of this Guaranty, be deemed a legal or equitable discharge of a surety or
guarantor, or by reason of any omission of the Administrative Agent, the
Lenders and the Issuing Bank, or any of them, or their failure to proceed
promptly or otherwise, or by reason of any action taken or omitted by the
Administrative Agent, the Lenders and the Issuing Bank, or any of them, whether
or not such action or failure to act varies or increases the risk of, or
affects the rights or remedies of, the Guarantor or by reason of any further
dealings between the Borrower, the Administrative Agent, the Lenders and the
Issuing Bank, or any of them, or any other guarantor or surety, and the
Guarantor hereby expressly waives and surrenders any right of counterclaim or
offset of any nature or description which it may have or which may exist based
upon any of the foregoing acts, omissions, things or agreements.

              6. The Administrative Agent, the Lenders and the Issuing Bank, or
any of them, may, without demand or notice of any kind upon or to Guarantor, at
any time or from time to time when any amount shall be due and payable
hereunder by the Guarantor, if the Borrower shall not have timely paid its
Obligations, set off and appropriate any property, balances, credit accounts or
moneys of the Guarantor in the possession of the Administrative Agent, the
Lenders, the Issuing Bank, or any of them, or under any of their control for
any purpose, which property, balances, credit accounts or moneys shall
thereupon be turned over and remitted to the Administrative Agent, to be held
and applied to the Obligations by the Administrative Agent in accordance with
the Loan Agreement.

<PAGE>

              7. Upon the bankruptcy or winding up or other distribution of
assets of the Borrower or of any surety or guarantor, for any Obligations of
the Borrower to the Administrative Agent, the Lenders, the Issuing Bank, or any
of them, the rights of the Administrative Agent, the Lenders and the Issuing
Bank against the Guarantor shall not be affected or impaired by the omission of
the Administrative Agent, the Lenders, the Issuing Bank, or any of them, to
prove its or their claim, as appropriate, or to prove its or their full claim,
as appropriate, and the Administrative Agent, the Lenders and the Issuing Bank
may prove such claims as they see fit and may refrain from proving any claim
and in their respective discretion they may value as they see fit or refrain
from valuing any security held by the Administrative Agent, the Lenders and the
Issuing Bank, or any of them, without in any way releasing, reducing or
otherwise affecting the liability to the Administrative Agent, the Lenders and
the Issuing Bank of the Guarantor.

              8. Any amount received by the Administrative Agent, the Lenders
and the Issuing Bank, or any of them, from whatsoever source and applied toward
the payment of the Obligations shall be applied in such order of application as
the Administrative Agent shall determine in its sole discretion.

              9. The Guarantor hereby expressly waives (a) notice of acceptance
of this Guaranty, (b) notice of the existence or creation of all or any of the
Obligations, (c) presentment, demand, notice of dishonor, protest and all other
notices whatsoever, (d) all diligence in collection or protection of or
realization upon the Obligations or any part thereof, any obligation hereunder,
or any security for any of the foregoing, (e) all rights of subrogation against
the Borrower, (f) all rights to enforce any remedy the Administrative Agent,
the Lenders and the Issuing Bank, or any of them, may have against the
Borrower, and (g) any benefit of, or right to participate in, any collateral or
security now or hereinafter held by the Administrative Agent, the Lenders and
the Issuing Bank, or any of them, in respect of the Obligations, even upon
payment in full of the Obligations, except to the extent such waiver would be
expressly prohibited by Applicable Law. If any payment made by the Borrower on
the Obligations shall be deemed to be a preference under the United States
Bankruptcy Code, as amended, or any other similar state insolvency statute, and
as a result thereof any such payment or portion thereof is required to be
disgorged by the Administrative Agent, the Lenders and the Issuing Bank, or any
of them, the Guarantor

<PAGE>

shall pay on behalf of such party the amount so required to be disgorged.

              10. The Administrative Agent, the Lenders and the Issuing Bank
may each, to the extent permitted under the Loan Agreement or the Reimbursement
Agreement, as applicable, and without notice of any kind, sell, assign or
transfer all or any of the Obligations, and in such event each and every
immediate and successive assignee, transferee, or holder of all or any of the
Obligations, shall have the right to enforce this Guaranty, by suit or
otherwise, for the benefit of such assignee, transferee or holder as fully as
if such assignee, transferee or holder were herein by name specifically given
such rights, powers and benefits.

              11. No delay by the Administrative Agent, the Lenders and the
Issuing Bank, or any of them, in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by the
Administrative Agent, the Lenders and the Issuing Bank, or any of them, of any
right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy. No action by the Administrative Agent,
the Lenders and the Issuing Bank, or any of them, permitted hereunder shall in
any way impair or affect this Guaranty. For the purpose of this Guaranty, the
Obligations shall include, without limitation, all Obligations of the Borrower
to the Administrative Agent, the Lenders and the Issuing Bank, notwithstanding
any right or power of any third party, individually or in the name of the
Borrower or any other Person, to assert any claim or defense as to the
invalidity or unenforceability of any such Obligation, and no such claim or
defense shall impair or affect the obligations of the Guarantor hereunder.

              12. This Guaranty shall be binding upon the Guarantor, its
successors and assigns and inure to the benefit of the successors and assigns
of the Administrative Agent, the Lenders and the Issuing Bank. The Guarantor
shall not assign its rights or obligations under this Guaranty nor shall the
Guarantor amend this Guaranty, except in accordance with the provisions of the
Loan Agreement and the Reimbursement Agreement.

              13. This is a Guaranty of payment and not of collection. In the
event the Administrative Agent makes a demand upon the Guarantor under this
Guaranty pursuant to the terms of the Loan Agreement or the Reimbursement
Agreement, as applicable, the Guarantor shall be held and bound to the
Administrative Agent, the Lenders and the Issuing Bank directly as debtor in
respect of the payment of

<PAGE>

the amounts hereby guaranteed. All costs and expenses, including reasonable
attorneys' fees and expenses, incurred by the Administrative Agent, the Lenders
and the Issuing Bank, or any of them, in obtaining performance of or collecting
payments due under this Guaranty shall be deemed part of the Obligations
guaranteed hereby. Any notice or demand which the Administrative Agent, the
Lenders and the Issuing Bank may wish to give shall be served upon the
Guarantor in the fashion prescribed for notices in Section 11.1 of the Loan
Agreement to the Guarantor's last known place of address, and the notice so
sent shall be deemed to be served as set forth in Section 11.1 of the Loan
Agreement.

              14. The Guarantor expressly represents and acknowledges that any
financial accommodations by the Administrative Agent, the Lenders and the
Issuing Bank, or any of them, to the Borrower, including, without limitation,
the extension of the Loans, and the execution and delivery of the Loan
Agreement by the parties thereto, are and will be of direct interest, benefit
and advantage to the Guarantor.

              15. (a) Prior to Default. At any time during which no Default or
Event of Default shall be continuing under the Guaranteed Agreements, the
Guarantor will permit a representative for the Administrative Agent, the
Lenders, and the Issuing Bank, to visit and inspect any of the Properties of
the Guarantor, to examine its books of account, records, reports and other
papers, to make extracts therefrom, and to discuss its affairs, finances, and
accounts with its officers and employees all at such reasonable times, but
(unless such a Default or Event of Default shall occur) not more often than
once during each calendar year, as may be reasonably requested.

                  (b) During Continuance of a Default. At any time during which
a Default or Event of Default shall be continuing under the Guaranteed
Agreements, the Guarantor will permit the representatives of the Administrative
Agent, each Lender, and the Issuing Bank, to visit and inspect any of the
Properties of the Guarantor, to examine its books of account, records, reports
and other papers, to make copies and extracts therefrom (so long as, in the
reasonable opinion of the Guarantor, the information to be copied does not
constitute proprietary information of its business operations), and to discuss
its affairs, finances and accounts with its officers, employees and independent
public accountants (and by this provision the Guarantor authorizes such
accountants to discuss the finances and affairs of the

<PAGE>

Guarantor) all at such reasonable times and as often as may be reasonably
requested.

              16. The Guarantor has provided Administrative Agent, the Lenders
and the Issuing Bank with its audited financial statements for the fiscal year
ended December 31, 1998, and with its unaudited financial statements for the
three quarter fiscal period ended March 31, 1999, which financial statements
are complete and correct in all material respects and present fairly, in
accordance with GAAP, the consolidated financial position of the Guarantor as
at the end of such periods and the consolidated results of operations for such
periods, and for the elapsed portion of the year ended with the last day of
such period, subject only to normal year-end adjustments. The Guarantor shall
further provide to the Administrative Agent, the Lenders and the Issuing Bank,
(a) within sixty (60) days after the end of each fiscal quarter of the
Guarantor, Form 10-Q of the Guarantor and its Subsidiaries on a consolidated
basis as filed with the Securities and Exchange Commission for the fiscal
quarter then ended, (b) within one hundred twenty (120) days after the end of
each fiscal year of the Guarantor, Form 10-K of the Guarantor and its
Subsidiaries on a consolidated basis as filed with the Securities and Exchange
Commission for the fiscal year then ended, and (c) promptly upon the filing or
delivery of such items, copies of all other material reports, proxies, notices
to shareholders and other materials filed by the Guarantor with the Securities
and Exchange Commission (excluding Registration Statements on Form S-8 and
Annual Reports on Form 11-K) or required by any Federal or state securities
laws, rules, or regulations, to be delivered by the Guarantor to the
shareholders of the Guarantor. From and after the date of the most recent
financial statements provided to the Administrative Agent, the Lenders and the
Issuing Bank to the date hereof, there has occurred no event which could
reasonably be expected to have a Materially Adverse Effect. For purposes of the
foregoing sentence, "Materially Adverse Effect" shall mean any materially
adverse effect upon the business, operations, assets, liabilities, financial
condition, results of operations or business prospects of the Guarantor and its
Subsidiaries, taken as a whole, or upon the ability of the Guarantor to honor
its obligations under this Guaranty, resulting from any act, omission,
situation, status, event or undertaking, either singly or taken together.

              17. The Guarantor agrees that it shall not, and shall not permit
its Subsidiaries to, create, assume, or incur any Lien on the equity interests
in the Borrower.

<PAGE>

              18. Guarantor agrees that it shall maintain at all times a ratio
of its Total Debt to its EBITDA of less than or equal to 3.5:1, calculated at
each quarter end on a trailing four-quarter basis. Such calculations shall be
provided by the Guarantor to the Administrative Agent not more than sixty (60)
days after the end of each calendar quarter. For purposes of this Section 18,
"Total Debt" shall mean all Indebtedness of the Guarantor and its Subsidiaries;
and "EBITDA" shall mean "Consolidated EBITDA" as defined in, and calculated in
the fashion set forth in, a certain Credit Agreement dated as of July 23, 1997,
as amended prior to the date of this Guaranty, among the Guarantor, the Lender
and the other banks listed therein, and Bankers Trust Company and the other
agents listed therein.

              19. The Guarantor agrees to indemnify and hold harmless each
Lender, the Administrative Agent, and the Issuing Bank, and each of their
respective affiliates, employees, representatives, officers and directors (any
of the foregoing shall be an "Indemnitee") from and against any and all claims,
liabilities, losses, damages, actions, attorneys' fees and expenses (as such
fees and expenses are incurred) and demand by any party, including the
reasonable costs of investigating and defending such claims,(a) resulting from
any breach or alleged breach by the Guarantor of any representation or warranty
made hereunder, or (b) arising out of any claims against the Lender, the
Administrative Agent, the Issuing Bank or any of them by any shareholder or
other investor in or lender to the Guarantor, by any brokers or finders or
investment advisors or investment bankers retained by the Guarantor or by any
other third party, for any reason whatsoever, or (c) in connection with the
execution, delivery and enforcement of this Guaranty and any other Loan
Documents to which the Guarantor is a party, and any subsequent amendments
thereto or waivers of any of the provisions thereof; unless the person seeking
indemnification hereunder acted or failed to act with gross negligence or
wilful misconduct or inconsistently with customary banking procedures. If any
claim, demand, action or cause of action is asserted against any Indemnitee
entitled to indemnification under the provisions of this Section 19, such
Indemnitee shall use its best efforts under the circumstances to notify the
Guarantor within thirty (30) days of its receipt of notice or knowledge of such
claim, demand, action or cause of action, provided that the failure of any
Indemnitee to give notice as provided herein shall not relieve the Guarantor of
any obligations under this Section 19. The obligations of the Guarantor under
this Section 19 are in addition to, and shall not otherwise limit, any
liabilities which the Guarantor might otherwise

<PAGE>

have in connection with any warranties or similar obligations of the Guarantor
in any other agreement or instrument or for any other reason; provided that the
obligations of the Guarantor under this section shall be limited to fifty
percent (50%) of the amount of liabilities accrued pursuant to the terms of
this section.

              20. This Guaranty shall be construed in accordance with and
governed by the internal laws of the State of New York applicable to contracts
made and to be performed in the State of New York. If any action or proceeding
shall be brought by the Administrative Agent in order to enforce any right or
remedy under this Guaranty, the Guarantor hereby consents and will submit to
the jurisdiction of any state or federal court of competent jurisdiction
sitting within the area comprising the Southern District of New York on the
date of this Guaranty. The Guarantor hereby agrees that service of the summons
and complaint and all other process which may be served in any such suit,
action or proceeding may be effected by mailing by registered mail a copy of
such process to the principal place of business of the Guarantor and that
personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law,
or the bringing of any suit, action or proceeding in any other jurisdiction.
The Guarantor agrees that final judgment in such suit, action or proceeding
shall be conclusive and may be enforced in any other jurisdiction by suit on
the judgment or in any other manner provided by law. THE GUARANTOR HEREBY
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR
PROCEEDING OF ANY TYPE IN WHICH THE GUARANTOR IS A PARTY, AS TO ALL MATTERS AND
THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THE LOAN AGREEMENT, THIS GUARANTY
OR ANY OF THE OTHER LOAN DOCUMENTS.

              IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed as of the date first above written.

                                    CARAUSTAR INDUSTRIES, INC.

                                    By: /s/ H. Lee Thrash, III
                                       ----------------------------------------
                                    Its: VP and CFO
                                        ---------------------------------------

<PAGE>

                          AMENDMENT TO PARENT GUARANTY

                  This Amendment (the "Amendment") dated as of September 29,
2000, to a certain Second Amended and Restated Parent Guaranty dated as of
August 1, 1999 (the "Parent Guaranty") issued by Caraustar Industries, Inc., a
North Carolina corporation (the "Guarantor"), in favor of Toronto Dominion
(Texas), Inc., as administrative agent for the Lenders and the Issuing Bank
(the "Administrative Agent"),

                                  WITNESSETH:

                  WHEREAS, an affiliate of the Administrative Agent has issued
for the account of Standard Gypsum, L.L.C., a Texas limited liability company
(the "Borrower") a letter of credit in the aggregate original face amount of
$46,643,014 (the "First Letter of Credit"), pursuant to Reimbursement Agreement
(the "First Reimbursement Agreement") dated as of May 1, 1999 between the
Borrower and the issuer of the Letter of Credit (the "Issuing Bank"); and

                  WHEREAS, the Issuing Bank has also issued for the account of
the Borrower an additional letter of Credit in the aggregate original face
amount of $10,095,891 (the "Second Letter of Credit" and, collectively with
First Letter of Credit, the "Letter of Credit"), pursuant to a Reimbursement
Agreement (the "Second Reimbursement Agreement" and, collectively with the
First Reimbursement Agreement, the ("Reimbursement Agreement") dated as of
August 1, 1999 between the Borrower and Issuing Bank; and

                  WHEREAS, Toronto Dominion (Texas), Inc. acts as
Administrative Agent for itself and for the benefit of the Issuing Bank in
connection with the transactions contemplated by the Reimbursement Agreement;
and

                  WHEREAS, the Borrower is a fifty percent (50%) subsidiary of
the Guarantor and the Guarantor, in connection with the transactions
contemplated by the Reimbursement Agreement, has agreed to guarantee fifty
percent (50%) of the obligations and covenants of the Borrower under the
Reimbursement Agreement and the other Loan Documents (the Reimbursement
Agreement and the other Loan Documents as previously executed and as amended,
modified or extended from time to time, the "Guaranteed Agreements"); and

                  WHEREAS, the Guarantee executed and delivered by the
Guarantor on August 1, 1999 required the Guarantor to maintain at all times a
ratio of Total Debt to its EBITDA of less than or equal to 3.5:1, calculated at
quarter end on a trailing four-quarter basis; and

                  WHEREAS, the Guarantor has requested that the Administrative
Agent, the Lenders and the Issuing Bank agree to amend such provision, and the
Administrative

<PAGE>

Agent, for itself and on behalf of the Lenders and the Issuing Bank, has agreed
to such amendment on the terms and conditions set forth herein;

                  NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Parent Guaranty and further agree as follows:

         1. Amendment of Section 18 of the Parent Guaranty. Section 18 of the
Parent Guaranty is hereby amended (i) by deleting the first sentence of such
Section, and by substituting the following therefor: "Guarantor agrees that it
shall maintain at all times a ratio of its Total Debt to its EBITDA of less
than or equal to 3.5:1, calculated at each quarter and on a trailing
four-quarter basis; provided, however, that as of the quarters ended September
30, 2000 and December 31, 2000, the ratio of its Total Debt to its EBITDA shall
not exceed 4.0:1." and (ii) by deleting the words " this Guaranty" in the last
sentence of such Section and by substituting therefor the words "the
Amendment."

         2. Representations and Warranties. The Guarantor hereby represents and
warrants in favor of the Administrative Agent on behalf of the Lenders and
Issuing Bank that:

                           (i) each representation and warranty set forth in
                  the Parent Guaranty is hereby restated and affirmed as true
                  and correct on the date hereof;

                           (ii) the Guarantor has the corporate power and
                  authority (a) to enter into this Amendment, and (b) to do all
                  acts and things as are required or contemplated hereunder to
                  be done, observed and performed by it;

                           (iii) this Amendment has been duly authorized,
                  validly executed and delivered by the Guarantor and the
                  Parent Guaranty, as amended by this Amendment, constitutes
                  the legal, valid and binding obligation of the Guarantor,
                  enforceable against it and in accordance with its terms; and

                           (iv) the execution and delivery of this Amendment
                  and performance by the Guarantor of its obligations under the
                  Parent Guaranty, as amended hereby, do not and will not
                  require the consent or approval of any regulatory authority
                  or governmental authority or agency having jurisdiction over
                  the Guarantor which has not already been obtained and will
                  not be in contravention of or in conflict with the
                  Certificate of Incorporation or By-laws of the Guarantor or
                  the provisions of any Applicable Law or any material
                  indenture, agreement or

                                       2
<PAGE>

                  other instrument to which the Guarantor is party or by which
                  its assets or properties are bound or affected.

         3. Conditions Precedent to Effectiveness. This Amendment shall be
effective as of the date first written above (the "Effective Date") upon the
occurrence of each of the following terms and conditions:

                  (a) The Administrative Agent shall have received duly
         executed counterparts of this Amendment signed by the Guarantor; and

                  (b) The truth and accuracy of the representations and
         warranties contained in Section 2 hereof; and

                  (c) The receipt by the Administrative Agent of any other
         documents which it may reasonably request, certified by an appropriate
         governmental official or officer of the Guarantor if so requested; and

                  (d) The Guarantor shall have paid to the Administrative Agent
         an amendment fee in the amount of 10 basis points on the amount
         guaranteed by the Guarantor under the Parent Guaranty.

         4. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceeding, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission shall be deemed an original signature hereto.

         5. Governing Law. This Amendment shall be deemed to be made pursuant
to the internal laws of the State of New York with respect to agreements made
and to be performed wholly in the State of New York, and shall be construed,
interpreted, performed and enforced in accordance therewith.

         6. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.

               [The remainder of the page is intentionally blank]

                                       3
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused it to be executed under seal by their duly authorized officers,
effective as of the day and year first written above.

GUARANTOR:                          CARAUSTAR INDUSTRIES, INC.

                                    By: /s/ H. Lee Thrash, III
                                       ----------------------------------------
                                       Its: VP & CFO
                                           ------------------------------------

ADMINISTRATIVE
AGENT:                              TORONTO DOMINION (TEXAS), INC.

                                    By: [authorized signature]
                                       ----------------------------------------

                                       Its:
                                           ------------------------------------

                                       4
<PAGE>

                 SECOND AMENDMENT TO PARENT GUARANTY AND WAIVER

                  This Amendment and Waiver (the "Amendment") dated as of March
13, 2001, to a certain Second Amended and Restated Parent Guaranty dated as of
August 1, 1999, as amended by a certain Amendment to Parent Guaranty dated as of
September 29, 2000 (collectively, the "Parent Guaranty") issued by Caraustar
Industries, Inc., a North Carolina corporation (the "Guarantor"), in favor of
Toronto Dominion (Texas), Inc., as administrative agent for the Lenders and the
Issuing Bank (the "Administrative Agent"),

                                  WITNESSETH:

                  WHEREAS, an affiliate of the Administrative Agent has issued
for the account of Standard Gypsum, L.P., a Delaware limited partnership and
the successor by conversion to Standard Gypsum, L.L.C., a Texas limited
liability company (the "Borrower"), a letter of credit in the aggregate
original face amount of $46,643,014 (the "First Letter of Credit"), pursuant to
a Reimbursement Agreement (the "First Reimbursement Agreement") dated as of May
1, 1999 between the Borrower and the issuer of the Letter of Credit (the
"Issuing Bank"); and

                  WHEREAS, the Issuing Bank has also issued for the account of
the Borrower an additional letter of Credit in the aggregate original face
amount of $10,095,891 (the "Second Letter of Credit" and, collectively with the
First Letter of Credit, the "Letter of Credit"), pursuant to a Reimbursement
Agreement (the "Second Reimbursement Agreement" and, collectively with the
First Reimbursement Agreement, the "Reimbursement Agreement") dated as of
August 1, 1999 between the Borrower and Issuing Bank; and

                  WHEREAS, Toronto Dominion (Texas), Inc. acts as
Administrative Agent for itself and for the benefit of the Issuing Bank in
connection with the transactions contemplated by the Reimbursement Agreement;
and

                  WHEREAS, the Borrower is a fifty percent (50%) subsidiary of
the Guarantor and the Guarantor, in connection with the transactions
contemplated by the Reimbursement Agreement, has agreed to guarantee fifty
percent (50%) of the obligations and covenants of the Borrower under the
Reimbursement Agreement and the other Loan Documents (the Reimbursement
Agreement and the other Loan Documents as previously executed and as amended,
modified or extended from time to time, the "Guaranteed Agreements"); and

                  WHEREAS, the Guarantee executed and delivered by the
Guarantor on August 1, 1999 required the Guarantor to maintain at all times a
ratio of Total Debt to its EBITDA of less than or equal to 4.0:1, calculated at
quarter end on a trailing four-quarter basis; and

<PAGE>

                  WHEREAS, the Guarantor has requested that the Administrative
Agent, the Lenders and the Issuing Bank agree to amend such provision, and the
Administrative Agent, for itself and on behalf of the Lenders and the Issuing
Bank, has agreed to such amendment on the terms and conditions set forth
herein;

                  NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Parent Guaranty and further agree as follows:

         1. Amendment and Restatement of Section 18 of the Parent Guaranty.
Section 18 of the Parent Guaranty is hereby amended and restated it its
entirety, by deleting the existing Section 18 and by substituting the following
therefor:

                  "Section 18. (a) Guarantor agrees that it shall maintain at
         all times during the effectiveness of this Guaranty its compliance
         with the following financial covenants:

                           (i) Guarantor shall maintain at all times a minimum
                  Tangible Net Worth of at least $109,735,000, such number to
                  be adjusted upwards by fifty percent (50%) of net income
                  (with no deduction for net losses), and by one hundred
                  percent (100%) of the proceeds of any issuance of equity. For
                  purposes of the foregoing financial covenant, "Tangible Net
                  Worth" shall mean the shareholders equity of Guarantor and
                  its subsidiaries, determined on a consolidated basis, less
                  the book value of all intangible assets.

                           "(ii) Guarantor shall maintain, measured at the end
                  of each fiscal quarter, a Leverage Ratio not to exceed the
                  following ratios for the indicated fiscal quarter ends:

<TABLE>
<CAPTION>
                                 Quarter Ended                            Maximum Leverage Ratio
                                 -------------                            ----------------------
                  <S>                                                     <C>
                  March 31, 2001 through                                           72.5%
                  September 30, 2001
                  December 31, 2001 through                                        70.0%
                  June 30, 2002
                  September 30, 2002 through                                       68.0%
                  December 31, 2002
                  March 31, 2003 and thereafter                                    66.0%
</TABLE>

                                       2
<PAGE>

         For purposes of determining compliance with this financial covenant,
         "Maximum Leverage Ratio" shall mean the ratio of all Guarantor's
         indebtedness for money borrowed to its total debt and equity
         capitalization, all calculated for the Guarantor and its subsidiaries
         on a consolidated basis.

                           "(iii) Guarantor shall maintain compliance with the
                  interest coverage ratios prescribed below, measured as of the
                  end of each fiscal quarter, based on the results of the
                  previous four fiscal quarters:

<TABLE>
<CAPTION>
                                                                               Minimum Interest Coverage
                          Quarters Ended                                                Ratio
                          --------------                                       --------------------------
                  <S>                                                          <C>
                  March 31, 2001 through                                                 2.50:1
                  September 30, 2001
                  December 31, 2001 through                                              2.75:1
                  June 30, 2002
                  September 30, 2002 and thereafter                                      3.00:1
</TABLE>

         For purposes for the foregoing financial covenant, "Interest Coverage
         Ratio" shall mean the ratio of the Guarantor's EBITDA (inclusive of
         EBITDA attributable to operations of the Borrower and the Premier
         Boxboard joint venture) to its cash interest expense, all calculated
         for the Guarantor and its subsidiaries on a consolidated basis.

                           "(iv) For purposes of determining compliance with
                  the foregoing financial covenants, accounting terms used
                  without definition will have their meanings under generally
                  accepted accounting principles, as in effect in the United
                  States from time to time.

                           "(v) The foregoing financial covenants (i) through
                  (iii) are intended by the parties to reflect the financial
                  covenants in a new senior credit facility for Guarantor, a
                  Term Sheet and Commitment Letter for which have been issued
                  by Bank of America, N.A. (the "New Facility"). In the event
                  that the New Facility's financial covenants differ in any
                  respect from those set forth herein, then the covenants set
                  forth herein shall be amended on the effective date of the
                  New Facility, mutatis mutandis, to reflect such covenants."

                  "(b) Guarantor agrees that it shall pay a fee in favor of the
         Administrative Agent for the benefit of the Issuing Bank, commencing
         on the

                                       3
<PAGE>

         effective date of the Second Amendment to this Guaranty, payable at
         the times and in the manner provided for the payment of Letter of
         Credit fees pursuant to Section 2.3 of the Reimbursement Agreement and
         Section 2.4 of the Loan Agreement, on fifty percent (50%) of the
         remaining face amount of the Letter of Credit, at a rate equal to the
         higher of the following rates per annum:

                           (i) One and one-half percent (1-1/2%) per annum,
                  less the rate set forth for the Letter of Credit fees in the
                  Reimbursement Agreement; or

                           (ii) The interest rate per annum equal to the
                  "Eurodollar Margin" payable on advances under the Guarantor's
                  existing senior credit facility (bearing interest at a rate
                  tied to the Eurodollar rate), as it may be refinanced by the
                  New Facility, less the rate set forth for the Letter of
                  Credit fees in the Reimbursement Agreement."

         2. Representations and Warranties. The Guarantor hereby represents and
warrants in favor of the Administrative Agent on behalf of the Lenders and
Issuing Bank that:

                           (i) each representation and warranty set forth in
                  the Parent Guaranty is hereby restated and affirmed as true
                  and correct on the date hereof;

                           (ii) the Guarantor has the corporate power and
                  authority (a) to enter into this Amendment, and (b) to do all
                  acts and things as are required or contemplated hereunder to
                  be done, observed and performed by it;

                           (iii) this Amendment has been duly authorized,
                  validly executed and delivered by the Guarantor and the
                  Parent Guaranty, as amended by this Amendment, constitutes
                  the legal, valid and binding obligation of the Guarantor,
                  enforceable against it and in accordance with its terms; and

                           (iv) the execution and delivery of this Amendment
                  and performance by the Guarantor of its obligations under the
                  Parent Guaranty, as amended hereby, do not and will not
                  require the consent or approval of any regulatory authority
                  or governmental authority or agency having jurisdiction over
                  the Guarantor which has not already been obtained and will
                  not be in contravention of or in conflict with the
                  Certificate of Incorporation or By-laws of the Guarantor or
                  the provisions of any Applicable Law or any material
                  indenture, agreement or other instrument to which the
                  Guarantor is party or by which its assets or properties are
                  bound or affected.

                                       4
<PAGE>

         3. Conditions Precedent to Effectiveness. This Amendment shall be
effective as of the date first written above (the "Effective Date") upon the
occurrence of each of the following terms and conditions:

                  (a) The Administrative Agent shall have received duly
         executed counterparts of this Amendment signed by the Guarantor;

                  (b) The truth and accuracy of the representations and
         warranties contained in Section 2 hereof;

                  (c) The receipt by the Administrative Agent of any other
         documents which it may reasonably request, certified by an appropriate
         governmental official or officer of the Guarantor if so requested; and

                  (d) The Guarantor shall have paid to the Administrative Agent
         an amendment fee in the amount of 10 basis points on the amount
         guaranteed by the Guarantor under the Parent Guaranty.

         4. Waiver; No Other Amendments or Waivers. (a) The Administrative
Agent, on behalf of the Lenders and the Issuing Bank, hereby waives any Default
or Event of Default now existing or hereafter arising as a result of (i) the
Guarantor's failure to comply with Section 18 of the Parent Guaranty (as in
effect immediately prior to giving effect to this Amendment) relating to the
ratio of Total Debt to EBITDA, each as defined in the Parent Guaranty
immediately prior to giving effect to this Amendment (the "Leverage Ratio
Requirement"), and (ii) any default or event of default under other
Indebtedness (including Guaranties) of the Guarantor, which default or event of
default arises as a result of the Guarantor's failure to comply with the
Leverage Ratio Requirement in the Parent Guaranty or to comply under the terms
of such other Indebtedness with the same requirements contained in the Leverage
Ratio Requirement.

                  (b) Except for the amendment expressly set forth and referred
to in Section 1 above and for the waiver granted in Section 4(a) above, the
Guaranty shall remain unchanged and in full force and effect and is hereby in
all respects ratified and affirmed.

         5. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceeding, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission shall be deemed an original signature hereto.

                                       5
<PAGE>

         6. Governing Law. This Amendment shall be deemed to be made pursuant
to the internal laws of the State of New York with respect to agreements made
and to be performed wholly in the State of New York, and shall be construed,
interpreted, performed and enforced in accordance therewith.

         7. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.

            [The remainder of the page is intentionally left blank]

                                       6
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused it to be executed under seal by their duly authorized officers,
effective as of the day and year first written above.

GUARANTOR:                          CARAUSTAR INDUSTRIES, INC.

                                    By: /s/ H. Lee Thrash, III
                                       ----------------------------------------
                                       Its: Vice President
                                            Planning & Development and
                                            Chief Finaancial Officer
                                           ------------------------------------

ADMINISTRATIVE
AGENT:                              TORONTO DOMINION (TEXAS), INC.

                                    By: /s/ Carol Brandt
                                       ----------------------------------------

                                       Its: Vice President
                                           ------------------------------------

                                       7
<PAGE>

                       THIRD AMENDMENT TO PARENT GUARANTY

                  This Amendment and Waiver (the "Amendment") dated as of April
12th, 2001, to a certain Second Amended and Restated Parent Guaranty dated as
of August 1, 1999, as amended by a certain Amendment to Parent Guaranty dated
as of September 29, 2000, and as amended by a certain Second Amendment to
Parent Guaranty and Waiver (collectively, the "Parent Guaranty") issued by
Caraustar Industries, Inc., a North Carolina corporation (the "Guarantor"), in
favor of Toronto Dominion (Texas), Inc., as administrative agent for the
Lenders and the Issuing Bank (the "Administrative Agent"),

                                  WITNESSETH:

                  WHEREAS, an affiliate of the Administrative Agent has issued
for the account of Standard Gypsum, L.P., a Delaware limited partnership and
the successor by conversion to Standard Gypsum, L.L.C., a Texas limited
liability company (the "Borrower"), a letter of credit in the aggregate
original face amount of $46,643,014 (the "First Letter of Credit"), pursuant to
a Reimbursement Agreement (the "First Reimbursement Agreement") dated as of May
1, 1999 between the Borrower and the issuer of the Letter of Credit (the
"Issuing Bank"); and

                  WHEREAS, the Issuing Bank has also issued for the account of
the Borrower an additional letter of Credit in the aggregate original face
amount of $10,095,891 (the "Second Letter of Credit" and, collectively with the
First Letter of Credit, the "Letter of Credit"), pursuant to a Reimbursement
Agreement (the "Second Reimbursement Agreement" and, collectively with the
First Reimbursement Agreement, the "Reimbursement Agreement") dated as of
August 1, 1999 between the Borrower and Issuing Bank; and

                  WHEREAS, Toronto Dominion (Texas), Inc. acts as
Administrative Agent for itself and for the benefit of the Issuing Bank in
connection with the transactions contemplated by the Reimbursement Agreement;
and

                  WHEREAS, the Borrower is a fifty percent (50%) subsidiary of
the Guarantor and the Guarantor, in connection with the transactions
contemplated by the Reimbursement Agreement, has agreed to guarantee fifty
percent (50%) of the obligations and covenants of the Borrower under the
Reimbursement Agreement and the other Loan Documents (the Reimbursement
Agreement and the other Loan Documents as previously executed and as amended,
modified or extended from time to time, the "Guaranteed Agreements"); and

                  WHEREAS, the Guarantor has requested that the Administrative
Agent, the Lenders and the Issuing Bank agree to amend certain provisions of
the Parent Guaranty, and the Administrative Agent, for itself and on behalf of
the Lenders and the Issuing Bank, has agreed to such amendments on the terms
and conditions set forth herein;

<PAGE>

                  NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Parent Guaranty and further agree as follows:

         1. Amendment and Restatement of Section 18 of the Parent Guaranty.
Section 18 of the Parent Guaranty is hereby amended and restated it its
entirety, by deleting the existing Section 18 and by substituting the following
therefor:

                  "Section 18. (a) Guarantor agrees that it shall maintain at
         all times during the effectiveness of this Guaranty its compliance
         with the following financial covenants:

                           (i) Guarantor shall maintain at all times a minimum
                  Tangible Net Worth of at least $108,900,000, such number to
                  be adjusted upwards by fifty percent (50%) of net income
                  (with no deduction for net losses), and by one hundred
                  percent (100%) of the proceeds of any issuance of equity. For
                  purposes of the foregoing financial covenant, "Tangible Net
                  Worth" shall mean the shareholders equity of Guarantor and
                  its subsidiaries, determined on a consolidated basis, less
                  the book value of all intangible assets.

                           "(ii) Guarantor shall maintain, measured at the end
                  of each fiscal quarter, a Leverage Ratio not to exceed the
                  following ratios for the indicated fiscal quarter ends:

<TABLE>
<CAPTION>
                                 Quarter Ended                            Maximum Leverage Ratio
                                 -------------                            ----------------------
                  <S>                                                     <C>
                  March 31, 2001 through                                           72.5%
                  December 31, 2001
                  March 31, 2002 through                                           70.0%
                  September 30, 2002
                  December 31, 2002 through                                        67.5%
                  June 30, 2003
                  September 30, 2003 and thereafter                                65.0%
</TABLE>

                  For purposes of determining compliance with this financial
                  covenant, "Maximum Leverage Ratio" shall mean the ratio of
                  all Guarantor's indebtedness for money borrowed to its total
                  debt and equity capitalization, all calculated for the
                  Guarantor and its subsidiaries on a consolidated basis.

                                       2
<PAGE>

                           "(iii) Guarantor shall maintain compliance with the
                  interest coverage ratios prescribed below, measured as of the
                  end of each fiscal quarter, based on the results of the
                  previous four fiscal quarters:

<TABLE>
<CAPTION>
                                                                               Minimum Interest Coverage
                                        Quarters Ended                                    Ratio
                                        --------------                         -------------------------
                  <S>                                                          <C>
                  March 31, 2001 through                                                 2.50:1
                  December 31, 2001
                  March 31, 2002 through                                                 2.75:1
                  September 30, 2002
                  December 31, 2002 and thereafter                                       3.00:1
</TABLE>

                  For purposes for the foregoing financial covenant, "Interest
                  Coverage Ratio" shall mean the ratio of the Guarantor's
                  EBITDA (inclusive of EBITDA attributable to operations of the
                  Borrower and the Premier Boxboard joint venture) to its cash
                  interest expense, all calculated for the Guarantor and its
                  subsidiaries on a consolidated basis.

                           "(iv) Guarantor shall not permit its capital
                  expenditures in any fiscal year to exceed the amount set
                  forth below with respect to such fiscal year:

<TABLE>
<CAPTION>
                                 Fiscal Year                                              Amount
                                 -----------                                              ------
                  <S>                                                                   <C>
                  Fiscal Year ending December 31, 2001                                  $40,000,000
                  Fiscal Year ending December 31, 2002                                  $45,000,000
                  Fiscal Year ending December 31, 2003                                  $50,000,000
                  Fiscal Year ending December 31, 2004                                  $50,000,000
</TABLE>

plus the unused amount available for Capital Expenditures under this Section
18(a)(iv) for the immediately preceding Fiscal Year (excluding any carry
forward available from any prior fiscal year).

                                       3
<PAGE>

                           "(v) For purposes of determining compliance with the
                  foregoing financial covenants, accounting terms used without
                  definition will have their meanings under generally accepted
                  accounting principles, as in effect in the United States from
                  time to time.

                  "(b) Guarantor agrees that it shall pay a fee in favor of the
         Administrative Agent for the benefit of the Issuing Bank, commencing
         on the effective date of the Third Amendment to this Guaranty, payable
         at the times and in the manner provided for the payment of Letter of
         Credit fees pursuant to Section 2.3 of the Reimbursement Agreement, on
         fifty percent (50%) of the remaining face amount of the Letter of
         Credit, at a rate equal to the higher of (i) the "Applicable
         Percentage" for "Offshore Rate Loans," as those terms are defined in a
         certain Credit Agreement dated as of March 29, 2001, among the
         Guarantor, certain of its subsidiaries, various lenders thereunder and
         Bank of America, N.A., as Administrative Agent, or (ii) the interest
         rate per annum equal to the per annum Letter of Credit fee that would
         be paid by Guarantor if its long-term senior unsecured debt alone were
         the basis for the application of the Pricing Grid contained in Section
         2.3(a) of the Reimbursement Agreement, less, in either case, the rate
         set forth for the Letter of Credit fees in the Reimbursement
         Agreement. In the event, however, that the Guarantor receives a
         long-term senior unsecured debt rating from Standard & Poor's of BB+
         or below and from Moody's of Ba1 or below, the additional fee payable
         hereunder shall be in the amount of 2.375% per annum less the rate set
         forth for the Letter of Credit fees in the Reimbursement Agreement."

         2. Representations and Warranties. The Guarantor hereby represents and
warrants in favor of the Administrative Agent on behalf of the Lenders and
Issuing Bank that:

                           (i) each representation and warranty set forth in
                  the Parent Guaranty is hereby restated and affirmed as true
                  and correct on the date hereof;

                           (ii) the Guarantor has the corporate power and
                  authority (a) to enter into this Amendment, and (b) to do all
                  acts and things as are required or contemplated hereunder to
                  be done, observed and performed by it;

                           (iii) this Amendment has been duly authorized,
                  validly executed and delivered by the Guarantor and the
                  Parent Guaranty, as amended by this Amendment, constitutes
                  the legal, valid and binding obligation of the Guarantor,
                  enforceable against it and in accordance with its terms; and

                           (iv) the execution and delivery of this Amendment
                  and performance by the Guarantor of its obligations under the
                  Parent Guaranty, as amended hereby, do not and will not
                  require the consent or

                                       4
<PAGE>

                  approval of any regulatory authority or governmental
                  authority or agency having jurisdiction over the Guarantor
                  which has not already been obtained and will not be in
                  contravention of or in conflict with the Certificate of
                  Incorporation or By-laws of the Guarantor or the provisions
                  of any Applicable Law or any material indenture, agreement or
                  other instrument to which the Guarantor is party or by which
                  its assets or properties are bound or affected.

         3. Conditions Precedent to Effectiveness. This Amendment shall be
effective as of the date first written above (the "Effective Date") upon the
occurrence of each of the following terms and conditions:

                  (a) The Administrative Agent shall have received duly
         executed counterparts of this Amendment signed by the Guarantor;

                  (b) The truth and accuracy of the representations and
         warranties contained in Section 2 hereof; and

                  (c) The receipt by the Administrative Agent of any other
         documents which it may reasonably request, certified by an appropriate
         governmental official or officer of the Guarantor if so requested.

         4. No Other Amendments or Waivers. Except for the amendments expressly
set forth and referred to in Section 1, the Guaranty shall remain unchanged and
in full force and effect and is hereby in all respects ratified and affirmed.

         5. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceeding, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission shall be deemed an original signature hereto.

         6. Governing Law. This Amendment shall be deemed to be made pursuant
to the internal laws of the State of New York with respect to agreements made
and to be performed wholly in the State of New York, and shall be construed,
interpreted, performed and enforced in accordance therewith.

         7. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.

            [The remainder of the page is intentionally left blank]

                                       5
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused it to be executed under seal by their duly authorized officers,
effective as of the day and year first written above.

GUARANTOR:                          CARAUSTAR INDUSTRIES, INC.

                                    By: /s/ William A. Nix, III
                                       ----------------------------------------
                                       Its: VP - Treasurer and Controller
                                           ------------------------------------

ADMINISTRATIVE
AGENT:                              TORONTO DOMINION (TEXAS), INC.

                                    By: /s/ Carol Brandt
                                       ----------------------------------------
                                       Its: Vice President
                                           ------------------------------------

                                       6
<PAGE>

                      FOURTH AMENDMENT TO PARENT GUARANTY

                  This Fourth Amendment to Parent Guaranty (the "Amendment") is
entered into as of January 18, 2002 (but with an effective date of September
30, 2001 pursuant to Section 3, below), to a certain Second Amended and
Restated Parent Guaranty dated as of August 1, 1999, as amended by a certain
Amendment to Parent Guaranty dated as of September 29, 2000, and as amended by
a certain Second Amendment to Parent Guaranty and Waiver dated as of March 13,
2001, as amended by a certain Third Amendment to Parent Guaranty dated as of
April 12, 2001 (collectively, the "Parent Guaranty") issued by Caraustar
Industries, Inc., a North Carolina corporation (the "Guarantor"), in favor of
Toronto Dominion (Texas), Inc., as administrative agent for the Lenders and the
Issuing Bank (the "Administrative Agent"),

                                  WITNESSETH:

                  WHEREAS, an affiliate of the Administrative Agent has issued
for the account of Standard Gypsum, L.P., a Delaware limited partnership and
the successor by conversion to Standard Gypsum, L.L.C., a Texas limited
liability company (the "Borrower"), a letter of credit in the aggregate
original face amount of $46,643,014 (the "First Letter of Credit"), pursuant to
a Reimbursement Agreement (the "First Reimbursement Agreement") dated as of May
1, 1999 between the Borrower and the issuer of the Letter of Credit (the
"Issuing Bank"); and

                  WHEREAS, the Issuing Bank has also issued for the account of
the Borrower an additional letter of Credit in the aggregate original face
amount of $10,095,891 (the "Second Letter of Credit" and, collectively with the
First Letter of Credit, the "Letter of Credit"), pursuant to a Reimbursement
Agreement (the "Second Reimbursement Agreement" and, collectively with the
First Reimbursement Agreement, the "Reimbursement Agreement") dated as of
August 1, 1999 between the Borrower and Issuing Bank; and

                  WHEREAS, Toronto Dominion (Texas), Inc. acts as
Administrative Agent for itself and for the benefit of the Issuing Bank in
connection with the transactions contemplated by the Reimbursement Agreement;
and

                  WHEREAS, the Borrower is a fifty percent (50%) subsidiary of
the Guarantor and the Guarantor, in connection with the transactions
contemplated by the Reimbursement Agreement, has agreed to guarantee fifty
percent (50%) of the obligations and covenants of the Borrower under the
Reimbursement Agreement and the other Loan Documents (the Reimbursement
Agreement and the other Loan Documents as previously executed and as amended,
modified or extended from time to time, the "Guaranteed Agreements"); and

                  WHEREAS, the Guarantor has requested that the Administrative
Agent, the Lenders and the Issuing Bank agree to amend certain provisions of
the

<PAGE>

Parent Guaranty, and the Administrative Agent, for itself and on behalf of
the Lenders and the Issuing Bank, has agreed to such amendments on the terms
and conditions set forth herein;

                  NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Parent Guaranty and further agree as follows:

         1. Amendment and Restatement of Section 18 of the Parent Guaranty.
Section 18 of the Parent Guaranty is hereby amended and restated it its
entirety, by deleting the existing Section 18(a)(iii) and by substituting the
following therefor:

                           "(iii) Guarantor shall maintain compliance with the
                  interest coverage ratios prescribed below, measured as of the
                  end of each fiscal quarter, based on the results of the
                  previous four fiscal quarters:

<TABLE>
<CAPTION>
                                                                               Minimum Interest Coverage
                                        Quarters Ended                                    Ratio
                                        --------------                         -------------------------
                  <S>                                                          <C>
                  March 31, 2001 through                                                 2.50:1
                  September 30, 2001
                  December 31, 2001 through                                              2.25:1
                  March 31, 2002
                  June 30, 2002                                                          2.50:1
                  September 30, 2002                                                     2.75:1
                  December 31, 2002 and thereafter                                       3.00:1
</TABLE>

                  For purposes for the foregoing financial covenant, "Interest
                  Coverage Ratio" shall mean the ratio of the Guarantor's
                  EBITDA (inclusive of EBITDA attributable to operations of the
                  Borrower and the Premier Boxboard joint venture) to its
                  "Interest Expense," as defined in the Guarantor's Credit
                  Agreement as in effect on the date hereof. The Guarantor's
                  "Credit Agreement" shall mean its Credit Agreement dated as
                  of March 29, 2001, as amended on or prior to the date hereof,
                  among the Guarantor, certain of its subsidiaries, the Lenders
                  thereunder, and Bank of America, N.A., as Administrative
                  Agent."

                                       2
<PAGE>

         2. Representations and Warranties. The Guarantor hereby represents and
warrants in favor of the Administrative Agent on behalf of the Lenders and
Issuing Bank that:

                           (i) each representation and warranty set forth in
                  the Parent Guaranty is hereby restated and affirmed as true
                  and correct on the date hereof;

                           (ii) the Guarantor has the corporate power and
                  authority (a) to enter into this Amendment, and (b) to do all
                  acts and things as are required or contemplated hereunder to
                  be done, observed and performed by it;

                           (iii) this Amendment has been duly authorized,
                  validly executed and delivered by the Guarantor and the
                  Parent Guaranty, as amended by this Amendment, constitutes
                  the legal, valid and binding obligation of the Guarantor,
                  enforceable against it and in accordance with its terms; and

                           (iv) the execution and delivery of this Amendment
                  and performance by the Guarantor of its obligations under the
                  Parent Guaranty, as amended hereby, do not and will not
                  require the consent or approval of any regulatory authority
                  or governmental authority or agency having jurisdiction over
                  the Guarantor which has not already been obtained and will
                  not be in contravention of or in conflict with the
                  Certificate of Incorporation or By-laws of the Guarantor or
                  the provisions of any Applicable Law or any material
                  indenture, agreement or other instrument to which the
                  Guarantor is party or by which its assets or properties are
                  bound or affected.

         3. Conditions Precedent to Effectiveness. This Amendment shall be
effective as of September 30, 2001 (the "Effective Date"), provided that each
of the following terms and conditions has been satisfied:

                  (a) The Administrative Agent shall have received duly
         executed counterparts of this Amendment signed by the Guarantor;

                  (b) The continued truth and accuracy of the representations
         and warranties contained in Section 2 hereof;

                  (c) The Administrative Agent shall have received a fee of
         0.15% on the maximum principal amount guarantied under this Guaranty;

                  (d) The Guarantor's requisite senior lenders shall have
         agreed to provisions amending the Guarantor's Credit Agreement dated
         as of March 29, 2001 among the Guarantor, certain of its subsidiaries,
         the lenders thereunder, and Bank of America, N.A., as Administrative
         Agent, substantially identical to the change in this Amendment to
         Section 18(a)(iii) of the Guaranty (and other senior lenders to the
         Guarantor similarly situated shall also have agreed to a substantially
         identical amendment); and

                                       3
<PAGE>

                  (e) The Administrative Agent shall have received any other
         documents it may reasonably request, certified by an appropriate
         governmental official or officer of the Guarantor if so requested.

         4. No Other Amendments or Waivers. Except for the amendment expressly
set forth and referred to in Section 1, the Guaranty shall remain unchanged and
in full force and effect and is hereby in all respects ratified and affirmed.

         5. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceeding, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission shall be deemed an original signature hereto.

         6. Governing Law. This Amendment shall be deemed to be made pursuant
to the internal laws of the State of New York with respect to agreements made
and to be performed wholly in the State of New York, and shall be construed,
interpreted, performed and enforced in accordance therewith.

         7. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.

            [The remainder of the page is intentionally left blank]

                                       4
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused it to be executed under seal by their duly authorized officers,
effective as of the day and year first written above.

GUARANTOR:                          CARAUSTAR INDUSTRIES, INC.

                                    By: [authorized signature]
                                       ----------------------------------------
                                       Its:
                                           ------------------------------------

ADMINISTRATIVE
AGENT:                              TORONTO DOMINION (TEXAS), INC.

                                    By: [authorized signature]
                                       ----------------------------------------
                                       Its:
                                           ------------------------------------

                                       5

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