RESTRUCTURING AND LOCK-UP AGREEMENT

Exhibit 10.05

R ESTRUCTURING AND L OCK - UP A GREEMENT

This RESTRUCTURING AND LOCK-UP AGREEMENT (this “ Agreement ”), dated as of May 29, 2009, is entered into by and among Caraustar Industries, Inc. (“ Caraustar ”), its direct and indirect domestic subsidiaries (Caraustar, such subsidiaries, and their respective successors and assigns, collectively, the “ Company ”), and the holders of Senior Notes (as defined below) of Caraustar signatory hereto (together with their respective successors and permitted assigns, the “ Consenting Holders ” and each, a “ Consenting Holder ”). The Company, each Consenting Holder and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof are referred herein as the “ Parties ” and individually as a “ Party ”.

P RELIMINARY S TATEMENTS

WHEREAS, as of the date hereof, the Consenting Holders hold, in the aggregate, (i) approximately 93% of the aggregate outstanding principal amount of Caraustar’s 7-  ³ / 8 % Senior Notes due 2009 (the “ 2009 Notes ”), issued under that certain Indenture dated as of June 1, 1999 (as amended and restated as of March 29, 2001), by and among Caraustar, the Subsidiary Guarantors (as defined therein) and The Bank of New York, as trustee (as amended or supplemented, the “ 2009 Indenture ”), and (ii) approximately 90% of the aggregate outstanding principal amount of Caraustar’s 7-  ¹ / 4 % Senior Notes due 2010 (the “ 2010 Notes ” and, together with the 2009 Notes, the “ Senior Notes ”), issued under that certain Indenture dated as of March 29, 2001, by and among Caraustar, the Guarantors (as defined therein) and The Bank of New York, as trustee (as amended or supplemented, the “ 2010 Indenture ” and, together with the 2009 Indenture, the “ Indentures ”);

WHEREAS, the Company and the Consenting Holders have agreed to implement a restructuring of the Company pursuant to the terms and conditions set forth in the Joint Plan of Reorganization attached hereto as Exhibit A (including the schedules and exhibits attached thereto and the additional schedules and exhibits to be prepared and filed after the date hereof based upon the term sheet attached hereto as Exhibit B , the “ Plan ”), which Plan is the product of arm’s length good faith discussions between the Company and members of an ad hoc committee of certain holders of the Senior Notes (the “ Ad Hoc Committee ”) whose members are the initial Consenting Holders signatory hereto;

WHEREAS, it is anticipated that, subject to the terms of this Agreement, the restructuring transactions contemplated by the Plan (the “ Restructuring Transactions ”) will be implemented through a solicitation of votes for the Plan pursuant to chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (as amended, the “ Bankruptcy Code ”) and one or more exemptions from the registration requirements under the Securities Act of 1933, as amended (the “ Solicitation ”); and

WHEREAS, the Company has agreed to commence voluntary reorganization cases under chapter 11 of the Bankruptcy Code for Caraustar and each of its direct and indirect domestic subsidiaries (the “ Chapter 11 Cases ”) in the United States Bankruptcy Court for the Northern District of Georgia (the “ Bankruptcy Court ”) to effect the Restructuring Transactions through the Plan.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

Section 1. Plan . The Plan is expressly incorporated herein and made part of this Agreement. The Plan sets forth the material terms and conditions of the Restructuring Transactions; however, the Plan is supplemented by the terms and conditions of this Agreement. In the event of any inconsistency between the Plan and this Agreement, this Agreement shall control.

Section 2. Certain Definitions . As used in this Agreement, the following terms have the following meanings:

(a) “ Definitive Documents ” means the documents implementing, achieving and relating to the Plan, including appropriate first day motions, the order of the Bankruptcy Court confirming the Plan, and definitive documentation relating to any debtor-in-possession financing, use of cash collateral, any exit financing, charter, bylaws and other corporate or organizational documents, shareholder related agreements, or other related documents, which shall contain terms and conditions consistent in all respects with the Plan and shall otherwise be reasonably satisfactory in all respects to the Company and the Requisite Holders, in accordance with Section 7 hereof.

(b) “ Lock-Up Effective Date ” means the date upon which this Agreement becomes effective and binding on the Parties in accordance with the provisions of Section 11 hereof.

(c) “ Lock-Up Period ” means the period commencing on the Lock-Up Effective Date and ending on the date on which this Agreement is terminated in accordance with Section 5 hereof.

(d) “ Material Adverse Effect ” means any event, change, effect, occurrence, development, circumstance or change of fact occurring after the date hereof that has had, or would reasonably be expected to have, a material adverse effect on the business, results of operations, financial condition, assets or liabilities of Caruastar and its subsidiaries taken as a whole; provided , however , that “Material Adverse Effect” shall not include any event, effect, occurrence, development, circumstance or change of fact arising out of, resulting from or attributable to (a) conditions or effects that generally affect the industries and markets in which the Company operates, (b) general economic conditions affecting the United States or Canada, (c) effects resulting from changes generally affecting financial, banking, credit, securities, or commodities markets, the economy in general, prevailing interest rates or general capital market conditions in the United States or Canada, (d) changes in the Company’s stock price or trading volume, the failure of the Company to maintain a listing on Nasdaq, or changes in the price of the Senior Notes (provided that this clause (d) shall not be construed as providing that the cause or factors affecting the Company’s stock price, trading volume or price of the Senior Notes does not constitute a Material Adverse Effect), (e) a change in U.S. GAAP or regulatory accounting principles or interpretations thereof after the date hereof, or a change in applicable law or

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interpretations thereof by any governmental entity, (f) the announcement of the Restructuring Transactions, the pendency of the Restructuring Transactions, or compliance by any Party with the covenants and agreements herein or in the Plan, (g) any act of war or terrorism (or, in each case, escalation thereof) or declaration of a national emergency, or (h) the acts or omissions of the holders of the Consenting Holders (except in each of clauses (a), (b), (c) and (g) above, if Caraustar and its subsidiaries taken as a whole are disproportionately affected thereby (but taking into account for purposes of determining a Material Adverse Effect only the disproportionate impact).

(e) “ Requisite Noteholders ” means Consenting Holders holding at least 66-  ² / 3 % in outstanding principal amount of the Senior Notes in the aggregate (as a combined class) held by the Consenting Holders; provided , however , that for purposes of Sections 3(b)(ii), 4(a)(i) through 4(b)(vii) or 10, “ Requisite Holders ” means Consenting Holders holding at least 66-  ² / 3 % in outstanding principal amount of the Senior Notes in the aggregate (as a combined class).

Section 3. Agreements of the Consenting Holders .

(a) Voting . Subject to the conditions contained in Section 3(b) hereof, each Consenting Holder agrees that, for the duration of the Lock-Up Period, such Consenting Holder shall, subject to the receipt by such Consenting Holder of a disclosure statement and other solicitation materials in respect of the Plan (the “ Disclosure Statement ”):

(i) timely vote or cause to be voted its claims against the Company arising under the Senior Notes to accept the Plan; provided , however , that such vote may, upon written notice to the Company and the other Parties, be revoked (and, upon such revocation, deemed void ab initio) by any Consenting Holder at any time after the Lock-Up Period;

(ii) timely vote or cause to be voted against and not consent to, or otherwise directly or indirectly support, solicit, assist, encourage or participate in the formulation of, any restructuring or reorganization of the Company (or any plan or proposal in respect of the same) other than the Plan; and

(iii) not (A) directly or indirectly seek, solicit, support or encourage the termination or modification of the exclusive period for the filing of any plan, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of the Company, or take any other action, including but not limited to initiating any legal proceedings or enforcing rights as a holder of the Senior Notes, that could prevent, interfere with, delay or impede the approval of the Disclosure Statement, the Solicitation or the implementation or consummation of the Restructuring Transactions as contemplated by the Plan, or (B) take any other action that is inconsistent with, or that would delay confirmation or consummation of, the Plan or the Restructuring Transactions.

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(b) Certain Conditions . The obligations of each Consenting Holder set forth in Section 3(a) hereof are subject to the following conditions:

(i) this Agreement shall have become effective in accordance with the provisions of Section 11;

(ii) the Requisite Noteholders shall have approved the form and substance of the Plan, the Disclosure Statement and the other Definitive Documents in all respects; and

(iii) this Agreement shall not have terminated in accordance with the terms of Section 5 hereof.

(c) Rights of Consenting Holders Unaffected . Nothing contained herein shall (i) limit (A) the ability of a Consenting Holder to consult with other Consenting Holders or the Company or (B) the rights of a Consenting Holder under any applicable bankruptcy, insolvency, foreclosure or similar proceeding, including, without limitation, appearing as a party in interest in any matter to be adjudicated to appear and be heard, concerning any matter arising in the Chapter 11 Cases, in each case, so long as such consultation or appearance is not inconsistent with the Consenting Holder’s obligations hereunder or under the terms of the Plan and are not for the purpose of hindering, delaying or preventing the consummation of the Restructuring Transactions; (ii) limit the ability of a Consenting Holder to sell or enter into any transactions in connection with the Senior Notes or any other claims against or interests in the Company, subject to Sections 3(d) and (e) hereof; or (iii) limit the rights of any Consenting Holder under the Indentures or constitute a waiver or amendment of any provision of the Indentures, subject to Section 3(a) hereof; provided however, that each Consenting Holder agrees that, for the duration of the Lock-Up Period, it will forbear from exercising any rights and remedies arising from the Company’s failure to pay any principal, interest or premium under any of the Senior Notes or from the acceleration of any such Senior Notes.

(d) Transfers . Each Consenting Holder agrees that, for the duration of the Lock-Up Period, such Consenting Holder shall not sell, transfer, loan, hypothecate, assign or otherwise dispose of (including by participation), in whole or in part, any of the Senior Notes or any option thereon or any right or interest therein (including the deposit of any Senior Notes into a voting trust or entry into a voting agreement with respect to any such Senior Notes), unless the transferee thereof either (i) is a Consenting Holder or (ii) prior to or concurrently with such transfer (or within five (5) business days after such transfer, provided that such transfer is to be rescinded if such agreement by the transferee is not obtained within such five business day period) agrees in writing for the benefit of the Parties to become a Consenting Holder and to be bound by all of the terms of this Agreement applicable to Consenting Holders by executing the Joinder attached hereto as Exhibit C (the “ Joinder Agreement ”), and delivering an executed copy thereof to Stroock & Stroock & Lavan LLP (“ Stroock ”), as counsel to the Ad Hoc Committee, in which event (a) the transferee shall be deemed to be a Consenting Holder hereunder to the extent of such transferred rights and obligations and (b) the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of such transferred rights and obligations. Each Consenting Holder agrees that any sale, transfer or assignment of any Senior Notes that does not comply with the terms and procedures set forth herein shall be deemed void ab initio, and the Company and each other Consenting Holder shall have the right to enforce the voiding of such transfer. Notwithstanding anything contained herein to the contrary, during the Lock-Up Period, a Consenting Holder may offer, sell or

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otherwise transfer any or all of its Senior Notes to any entity that, as of the Lock-Up Effective Date was, and as of the date of transfer continues to be, an entity that controls, is controlled by or is under common control with the Consenting Holder and is (or executes a Joinder Agreement under which such entity agrees to become) a Party to this Agreement.

(e) Additional Claims or Equity Interests . To the extent any Consenting Holder (a) acquires additional Senior Notes, (b) holds or acquires any other claims against the Company entitled to vote on the Plan or (c) holds or acquires any equity interests in the Company entitled to vote on the Plan, each such Consenting Holder agrees that such Senior Notes or other claims or equity interests shall be subject to this Agreement and that, for the duration of the Lock-Up Period, it shall vote (or cause to be voted) any such additional Senior Notes or other claims or equity interests (in each case, to the extent still held by it or on its behalf at the time of such vote) in a manner consistent with Section 3(a) hereof.

Section 4. Agreements of the Company .

(a) Affirmative Covenants . The Company agrees that, as of the date hereof through the effective date of the Plan and for so long as this Agreement has not been terminated in accordance with its terms, unless (x) otherwise expressly permitted or required by this Agreement, or (y) otherwise consented to in writing by the Requisite Noteholders (which consent shall not be unreasonably withheld or delayed), Caraustar shall, and shall cause each of its direct and indirect subsidiaries to, directly or indirectly, do the following:

(i) complete the preparation, as soon as practicable after the date hereof, of each of the Plan, Disclosure Statement and the other Definitive Documents, which documents shall contain terms and conditions consistent with the Plan and shall otherwise be reasonably satisfactory to the Requisite Noteholders, and distribute such documents and afford reasonable opportunity of comment and review to the respective legal and financial advisors for the Consenting Holders in advance of any filing thereof;

(ii) (A) commence the Chapter 11 Cases and file the Plan and Disclosure Statement not later than 11:59 P.M. prevailing Eastern Time on May 31, 2009 (the “ Filing Date ”); (B) obtain approval of the Disclosure Statement and authorization to solicit approval of the Plan by entry of an order of the Bankruptcy Court not later than 5:00 P.M. prevailing Eastern Time on the date (the “ Disclosure Statement Approval Date ”) that is thirty-five (35) calendar days after the Filing Date; (C) commence the Solicitation not later than 5:00 P.M. prevailing Eastern Time on the date (the “ Solicitation Commencement Date ”) that is three (3) calendar days after the Disclosure Statement Approval Date; (D) successfully conclude the Solicitation (i.e., obtain votes accepting the Plan from holders of the Senior Notes sufficient to satisfy the conditions for acceptance set forth in Sections 1126(b) and (c) of the Bankruptcy Code) not later than 5:00 P.M. prevailing Eastern Time on the date that is thirty (30) calendar days after the Solicitation Commencement Date; (E) obtain confirmation of the Plan by entry of an order of the Bankruptcy Court not later than 5:00 P.M. prevailing Eastern Time on the date (the “ Confirmation Date ”) that is thirty-five (35) calendar days after the Solicitation Commencement Date; and (F) consummate the Plan not later than 5:00 P.M. prevailing Eastern Time on the date that is ten (10) calendar days after the Confirmation Date; provided , however , that in the event that the Company fails to comply with any of the deadlines set forth in clause

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(B), (C), (D), (E) or (F) of this paragraph as a result of the entry of an order by the Bankruptcy Court upon a written motion of the United States Trustee or an official committee appointed in the Chapter 11 Cases requesting an adjournment of the deadlines provided in clauses (B) and (E) hereof, then the Company shall have an additional twenty (20) calendar days to comply with such subsequent deadlines;

(iii) except where it is not reasonably practicable, provide draft copies of all motions or applications and other documents the Company intends to file with the Bankruptcy Court to counsel for the Ad Hoc Committee at least two (2) business days prior to the date when the Company intends to file any such document and consult in good faith with counsel to the Ad Hoc Committee regarding the form and substance of any such proposed filing with the Bankruptcy Court;

(iv) maintain their good standing under the laws of the state or other jurisdiction in which they are incorporated or organized;

(v) timely file a formal objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order directing the appointment of an examiner with expanded powers or a trustee, converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or dismissing the Chapter 11 Cases;

(vi) timely file a formal objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order modifying or terminating the Company’s exclusive right to file and/or solicit acceptances of a plan of reorganization;

(vii) provide to the Consenting Holders, Stroock, as counsel to the Ad Hoc Committee, and Moelis & Company, as financial advisors to the Ad Hoc Committee (“ Moelis ”, and together with Stroock, the “ Ad Hoc Committee Advisors ”), (i) reasonable access (without any material disruption to the conduct of the Company’s business) during normal business hours to the Company’s books, records and facilities, (ii) reasonable access to the respective management and advisors of the Company for the purposes of evaluating the Company’s business plans and participating in the planning process with respect to the Restructuring Transactions, (iii) timely and reasonable responses to all reasonable diligence requests and (iv) information with respect to all executory contracts and unexpired leases of the Company for the purposes of concluding, in consultation with the Company and its advisors, which executory contracts and unexpired leases the Company will assume, assume and assign or reject in the Chapter 11 Cases;

(viii) timely and fully discharge all of its obligations then due and owing under any existing agreements of the Company regarding the payment of the reasonable fees and expenses of the Ad Hoc Committee Advisors in connection with the Restructuring Transactions; and (A) on the date that is at least one (1) day prior to the Filing Date, the Company shall pay to Stroock (i) all reasonable amounts then due and outstanding as provided in an invoice supplied to the Company containing a summary of hours and services provided, and (ii) a retainer in an amount necessary to increase Stroock’s retainer already held to $900,000, any unused portion of which shall be refunded to the Company within forty-five (45) calendar days after the effective date of the Plan; (B) on the date that is at least one (1) day prior to the Filing Date, the Company

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shall pay to Moelis (i) all monthly fees and reasonable expenses then due and outstanding, and (ii) a retainer in an amount of $600,000, any unused portion of which shall be refunded to the Company within forty-five (45) calendar days after the effective date of the Plan; and (C) to the extent the reasonable fees and expenses of Stroock and Moelis exceed their respective retainers as of the date of confirmation of the Plan, the terms of the Plan shall provide that the Company will pay Stroock and Moelis their outstanding fees and expenses pursuant to section 1129(a)(4) of the Bankruptcy Code;

(ix) notify the other Parties of any governmental or third party complaints, litigations, investigations or hearings (or communications indicating that the same may be contemplated or threatened), in any such case which could reasonably be anticipated to have a Material Adverse Effect;

(x) work in good faith with the Ad Hoc Committee Advisors to determine an appropriate cap (to be set forth as a condition to effectiveness in the Plan) for all allowed general unsecured claims (other than claims arising under the Senior Notes) in the Chapter 11 cases; and

(xi) prior to the filing of the Chapter 11 Cases, take all actions that the term sheet attached hereto as Exhibit B calls for the Company to take prior to the filing of the Chapter 11 Cases.

(b) Negative Covenants . The Company agrees that, as of the date hereof through the effective date of the Plan and for so long as this Agreement has not been terminated in accordance with its terms, unless (x) otherwise expressly permitted or required by this Agreement or the Plan, or (y) otherwise consented to in writing by the Requisite Noteholders or counsel for the Ad Hoc Committee (which consent shall not be unreasonably withheld or delayed), Caraustar shall not, and shall cause each of its direct and indirect subsidiaries not to, directly or indirectly, do or permit to occur any of the following:

(i) propose, support, assist, engage in negotiations in connection with or participate in the formulation of, any restructuring or reorganization of the Company (or any plan or proposal in respect of the same) other than the Plan;

(ii) modify the Plan, in whole or in part, in a manner that is not consistent in any material respect with this Agreement or the Plan Term Sheet;

(iii) withdraw or revoke the Plan or publicly announce its intention not to pursue the Plan;

(iv) file any motion or pleading or other Definitive Document with the Bankruptcy Court (including any modifications or amendments thereof) that, in whole or in part, is not consistent in any material respect with this Agreement, the Plan Term Sheet, or the Plan and is not otherwise reasonably satisfactory in all respects to the Requisite Noteholders or counsel for the Ad Hoc Committee;

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(v) move for an order authorizing or directing the assumption or rejection of an executory contract or unexpired lease other than in accordance with the Plan or as approved in writing by the Requisite Noteholders;

(vi) commence an avoidance action or other legal proceeding that challenges the validity, enforceability or priority of the Senior Notes, or otherwise affects the rights of any Consenting Holder;

(vii) commence a voluntary chapter 11 case or any similar insolvency proceedings prior to the Filing Date;

(viii) issue, sell, pledge, dispose of or encumber any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, any of its equity interests, including, without limitation, capital stock or partnership interests;

(ix) amend or propose to amend its respective certificate or articles of incorporation, bylaws or comparable organizational documents;

(x) split, combine or reclassify any outstanding shares of its capital stock or other equity interests, or declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise with respect to any of its equity interests;

(xi) redeem, purchase or acquire or offer to acquire any of its equity interests, including, without limitation, capital stock or partnership interests;

(xii) acquire or divest (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) (I) any corporation, partnership, limited liability company, joint venture or other business organization or division or (II) assets of the Company, other than in the ordinary course of business;

(xiii) incur any capital expenditures other than maintenance capital expenditures in the ordinary course of business and in amounts consistent with historical business practices;

(xiv) incur or suffer to exist any indebtedness, except indebtedness existing and outstanding immediately prior to the date hereof, trade payables and other similar liabilities arising and incurred in the ordinary course of business, and indebtedness arising under any debtor-in-possession financing satisfactory to the Requisite Noteholders and approved in the Chapter 11 Cases;

(xv) incur any liens, other than those existing immediately prior to the date hereof;

(xvi) enter into any commitment or agreement with respect to debtor-in-possession financing, cash collateral and/or exit financing;

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(xvii) enter into any executive employment agreements or collective bargaining agreements or modify any existing employment agreements, collective bargaining agreements or benefit plans;

(xviii) hire any executive or employee whose total compensation is greater than $100,000 or increase the compensation for any executive or employee whose total compensation is greater than $100,000;

(xix) make any interest payment on the 2010 Notes or the 2009 Notes without simultaneously making a corresponding interest payment on the other series of Notes;

(xx) allow or settle claims or any pending litigation for more than $50,000 per claim individually, or $300,000 in the aggregate; or

(xxi) commence insolvency