**EXECUTIONVERSION**

** **

**Exhibit 10.2**

 

**CONTINUINGGUARANTY**

 

CONTINUINGGUARANTY (“Guaranty”) dated as of July 28, 2008, made by andbetween SMURFIT-STONE CONTAINER ENTERPRISES, INC., a Delaware corporation (“Guarantor”),and UNION BANK OF CALIFORNIA, N.A. (“Bank”).

 

RECITALS

 
| (a)                                                           | ** ** | **WHEREAS**, Guarantor is a leading U.S.  integrated manufacturer of various paperboard and paper-based packaging  material;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (b)                                                           | ** ** | **WHEREAS**, Guarantor has agreed to acquire 90%  of the membership interests of CALPINE CORRUGATED, LLC, a California limited  liability company formerly known as Produce Container, LLC (“Borrower”),  pursuant to a restructuring of the ownership interests of Borrower pursuant  to the Amended and Restated Operating Agreement being entered into  concurrently herewith;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (c)                                                           | ** ** | **WHEREAS,**Borrower and Bank have entered into the  Loan and Security Agreement dated March 30, 2006, as amended by the  First Amendment to Loan and Security Agreement dated as of August 30,  2006, the Second Amendment to Loan and Security Agreement dated as of  December 10, 2007, the Third Amendment to Loan and Security Agreement  dated as of December 31, 2007, the Fourth Amendment to Loan and Security  Agreement dated as of January 31, 2008, the Fifth Amendment to Loan and  Security Agreement dated as of February 29, 2008, and the Sixth  Amendment to Loan and Security Agreement of even date herewith (including all  exhibits and schedules thereto, and as the same may be subsequently amended,  restated, supplemented or otherwise modified from time to time, collectively,  the “Loan Agreement”); |
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (d)                                                           | ** ** | **WHEREAS**, Guarantor has agreed to guarantee the  Obligations of Borrower;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (e)                                                           | ** ** | **WHEREAS**, Guarantor has requested that Bank  increase the maximum amount of its financing to Borrower by $3,000,000, to an  aggregate principal amount not exceeding $12,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (f)                                                           | ** ** | **WHEREAS**, Guarantor will derive substantial  benefit if the financing continues to be provided by Bank, and the maximum  amount of such financing is increased pursuant to the terms of the Sixth  Amendment to Loan and Security Agreement between Borrower and Bank of even  date herewith (the “Sixth Amendment”); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (g)                                                           | ** ** | **WHEREAS**, it is a condition precedent, among  others, to the obligation of Bank to continue to provide and increase the  maximum amount of its financing to Borrower under the Sixth Amendment that  the Guarantor shall have executed and delivered this Guaranty to the Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                          | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                          | ** ** | **NOW, THEREFORE**, in consideration of the foregoing  premises, to induce the Borrower and Bank to enter into the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Sixth Amendment,  Guarantor and Bank hereby agree as follows: |

 
| 1. | ** ** | **Obligations Guaranteed.**   For consideration, the adequacy and sufficiency of which is  acknowledged, Guarantor unconditionally guaranties and promises (a) to  pay to Bank on demand, in lawful United States money, all Obligations (as  such term is defined below), and (b) to perform all undertakings of  Borrower in connection with Obligations.   “Obligations” means all Obligations of Borrower when due and  payable to Bank under the Loan Agreement and the other Loan Documents,  whether made, incurred or created previously, concurrently or in the future,  whether voluntary or involuntary and however arising, whether incurred  directly or acquired by |
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|   |       | Bank by assignment or  succession, absolute or contingent, liquidated or unliquidated, legal or  equitable, whether Borrower is liable individually or jointly with others,  whether incurred before, during or after any bankruptcy, reorganization,  insolvency, receivership or similar proceeding (“Insolvency Proceeding”),  and whether recovery thereof is or becomes barred by a statute of limitations  or is or becomes otherwise unenforceable, together with all expenses of, for  and incidental to collection, including, without limitation, reasonable  attorneys’ fees. All capitalized terms used and not otherwise defined herein  shall have the respective meanings ascribed to them in the Loan Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.     | ** ** | **Continuing  Nature/Revocation/Reinstatement.** This Guaranty (a) is in addition to any other  guaranties of the Obligations, (b) is a continuing guaranty, and  (c) covers all Obligations, including, without limitation, those arising  under successive transactions which continue or increase the Obligations from  time to time, renew all or part of the Obligations after they have been  satisfied or create new Obligations. Revocation by one or more signers of  this Guaranty or any other guarantors of the Obligations shall not  (a) affect the obligations under this Guaranty of a non-revoking Guarantor,  (b) apply to Obligations outstanding when Bank receives written notice  of revocation, or to any extensions, renewals, readvances, modifications,  amendments or replacements of such Obligations, or (c) apply to  Obligations, arising after Bank receives such notice of revocation that are  created pursuant to a commitment existing at the time of the revocation,  whether or not there exists an unsatisfied condition to such commitment or  Bank has another defense to its performance. All of Bank’s rights pursuant to  this Guaranty continue with respect to amounts previously paid to Bank on  account of any Obligations which are thereafter restored or returned by Bank,  whether in an Insolvency Proceeding of Borrower or for any other reason, all  as though such amounts had not been paid to Bank; and Guarantor’s liability  under this Guaranty (and all of its terms and provisions) shall be reinstated  and revived, notwithstanding any surrender or cancellation of this Guaranty.  Bank, at its sole discretion, may determine whether any amount paid to it  must be restored or returned; provided, however, that if Bank elects to  contest any claim for return or restoration, Guarantor agrees to indemnify  and hold Bank harmless from and against all costs and expenses, including, without  limitation, reasonable attorneys’ fees, expended or incurred by Bank in  connection with such contest. If any Insolvency Proceeding is commenced by or  against Borrower or Guarantor, at Bank’s election, Guarantor’s obligations  under this Guaranty shall immediately and without notice or demand become due  and payable, whether or not then otherwise due and payable. |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.     | ** ** | **Authorization.** Guarantor authorizes Bank, without  notice and without affecting Guarantor’s liability under this Guaranty, from  time to time, whether before or after any revocation of this Guaranty, to:  (a) renew, compromise, extend, accelerate, release, subordinate, waive,  amend and restate, or otherwise amend or change, the interest rate, time or  place for payment or any other terms of all or any part of the Obligations to  the extent permitted in the Loan Agreement; (b) accept delinquent or  partial payments of the Obligations; (c) take or not take security or  other credit support for this Guaranty or for all or any part of the  Obligations, and exchange, enforce, waive, release, subordinate, fail to  enforce or perfect, sell, or otherwise dispose of any such security or credit  support; (d) apply proceeds of any such security or credit support and  direct the order or manner of its sale or enforcement as Bank, at its sole  discretion may determine; and (e) release or substitute Borrower or any  guarantor or other person or entity liable on the Obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.     | ** ** | **Waivers.** To the maximum extent permitted by  law, Guarantor waives (a) all rights to require Bank to proceed against  Borrower, or any other guarantor, or proceed against, enforce or exhaust any  security for the Obligations or to marshal assets or to pursue any other  remedy in Bank’s power whatsoever; (b) all defenses arising by reason of  any disability or other defense of Borrower, the cessation for any reason of  the liability of Borrower, any defense that any other indemnity, guaranty or  security was to be obtained, any claim that Bank has made Guarantor’s  obligations more burdensome or more burdensome than Borrower’s obligations,  and the use of any proceeds of the Obligations other than as intended or  understood by Bank or Guarantor; (c) all presentments, demands for  performance, notices of nonperformance, protests, notices of protest, notices  of dishonor, notices of acceptance of this Guaranty and the existence or  creation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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|   |       | of new or additional  Obligations, and all other notices or demands to which Guarantor might  otherwise be entitled; (d) all rights to file a claim in connection with  the Obligations in an Insolvency Proceeding filed by or against Borrower  except as subordinate to Bank’s claim; (e) all rights to require Bank to  enforce any of its remedies; and (f) until the Obligations are satisfied  and fully and finally paid with such payment not subject to return  (i) all rights of subrogation, contribution, indemnification or  reimbursement, (ii) all rights of recourse to any assets or property of  Borrower, or to any collateral or credit support for the Obligations except  as subordinate to Bank’s rights, (iii) all rights to participate in or  benefit from any security or credit support Bank may have or acquire, and  (iv) all rights, remedies and defenses Guarantor may have or acquire against  Borrower. Guarantor understands that if Bank forecloses by trustee’s sale on  a deed of trust securing any of the Obligations, Guarantor would then have a  defense preventing Bank from thereafter enforcing Guarantor’s liability for  the unpaid balance of the secured Obligations. This defense arises because  the trustee’s sale would eliminate Guarantor’s right of subrogation, and  therefore Guarantor would be unable to obtain reimbursement from Borrower.  Guarantor specifically waives this defense and all rights and defenses that  Guarantor may have against Bank because the Obligations are secured by real  property. This means, among other things: (A) Bank may collect from  Guarantor without first foreclosing on any real property collateral pledged  by Borrower; and (B) if Bank forecloses on any real property collateral  pledged by Borrower, then: (I) the amount of the Obligations may be  reduced only by the price for which the collateral is sold at the foreclosure  sale, even if the collateral is worth more than the sale price, and  (II) Bank may collect from Guarantor even if Bank, by foreclosing on the  real property collateral, has destroyed any right Guarantor may have to  collect from Borrower. This is an unconditional and irrevocable waiver of any  rights and defenses Guarantor may have because the Obligations are secured by  real property. These rights and defenses include, but are not limited to, any  rights or defenses based upon Section 580a, 580b, 580d or 726 of the  California Code of Civil Procedure or similar laws in other states. In  addition, Guarantor waives all rights and defenses arising out of an election  of remedies by Bank, even though that election of remedies, such as  non-judicial foreclosure with respect to security for a secured obligation,  may have destroyed Guarantor’s rights of subrogation by the operation of  Section 580d of the California Code of Civil Procedure or otherwise. |
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| 5.     | ** ** | **Guarantor to Keep Informed.** Guarantor warrants having established  with Borrower adequate means of obtaining, on an ongoing basis, such  information as Guarantor may require concerning all matters bearing on the  risk of nonpayment or nonperformance of the Obligations. Guarantor assumes  sole, continuing responsibility for obtaining such information from sources  other than from Bank. Bank has no duty to provide any information to  Guarantor until Bank receives Guarantor’s written request for specific  information in Bank’s possession and Borrower has authorized Bank to disclose  such information to Guarantor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| 6.     | ** ** | **Intentionally Omitted**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| 7.     | ** ** | **Authorization.** Where Borrower is a corporation,  partnership or other entity, Bank need not inquire into or verify the powers  of Borrower or authority of those acting or purporting to act on behalf of  Borrower, and this Guaranty shall be enforceable with respect to any  Obligations Bank grants or creates in reliance on the purported exercise of  such powers or authority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| 8.     | ** ** | **Assignments.** Without notice to Guarantor, Bank may  assign the Obligations and this Guaranty, in whole or in part, in accordance  with the terms of the Loan Agreement and may disclose to any prospective or  actual purchaser of all or part of the Obligations any and all information  Bank has or acquires concerning Guarantor, this Guaranty and any security for  this Guaranty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| 9.     | ** ** | **Counsel Fees and Costs.** The prevailing party shall be entitled  to reasonable attorneys’ fees and all other reasonable out-of-pocket costs  and expenses which it may incur in connection with the enforcement or  preservation of its rights under, or defense of, this Guaranty or in  connection with any other dispute or proceeding relating to this Guaranty  whether or not incurred in any                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

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|   |       | Insolvency Proceeding,  arbitration, litigation or other proceeding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.    | ** ** | **Multiple Guarantors/Borrowers.** When there is more than one Borrower  named herein or when this Guaranty is executed by more than one Guarantor,  then the words “Borrower” and “Guarantor”, respectively, shall mean all and  any one or more of them, and their respective successors and assigns,  including, without limitation, debtors-in-possession and bankruptcy trustees;  words used herein in the singular shall be considered to have been used in  the plural where the context and construction so requires in order to refer  to more than one Borrower or Guarantor, as the case may be.                                                                                                                                                                                                                                 |
|   | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 11.    | ** ** | **Integration/Severability/Amendments.** This Guaranty is intended by Guarantor  and Bank as the complete, final expression of their agreement concerning its  subject matter. It supersedes all prior understandings or agreements with  respect thereto and may be changed only by a writing signed by Guarantor and  Bank. No course of dealing, or parole or extrinsic evidence shall be used to  modify or supplement the express terms of this Guaranty. If any provision of  this Guaranty is found to be illegal, invalid or unenforceable, such  provision shall be enforced to the maximum extent permitted, but if fully  unenforceable, such provision shall be severable, and this Guaranty shall be  construed as if such provision had never been a part of this Guaranty, and  the remaining provisions shall continue in full force and effect. |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 12.    | ** ** | **Joint and Several.** If more than one Guarantor signs this  Guaranty, the obligations of each under this Guaranty are joint and several,  and independent of the Obligations and of the obligations of any other person  or entity. A separate action or actions may be brought and prosecuted against  any one or more guarantors, whether action is brought against Borrower or  other guarantors of the Obligations, and whether Borrower or others are  joined in any such action.                                                                                                                                                                                                                                                                                                                                                                         |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 13.    | ** ** | **Notice.** Any notice, including, without  limitation, notice of revocation, given by any party under this Guaranty  shall be effective only upon its receipt by the other party and only if  (a) given in writing and (b) personally delivered, sent by United  States mail, postage prepaid, or sent out by facsimile transmission (with  such facsimile promptly confirmed by delivery of a copy by personal delivery  or United States mail as otherwise provided in this paragraph), and addressed  to Bank or Guarantor at their respective addresses for notices indicated  below. Guarantor and Bank may change the place to which notices, requests,  and other communications are to be sent to them by giving written notice of  such change to the other.                                                                                 |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 14.    | ** ** | **Governing Law.** This Guaranty shall be governed by and  construed according to the laws of California, and Guarantor submits to the  nonexclusive jurisdiction of the state or federal courts in California.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 15.    | ** ** | **Patriot Act.** Bank is subject to the Patriot Act and  hereby notifies Guarantor that pursuant to the requirements of the Patriot  Act, Bank is required to obtain, verify and record information that  identifies Guarantor, which information includes the name and address of  Guarantor and other information that will allow Bank to identify Guarantor in  accordance with the Patriot Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 16.    | ** ** | **JUDICIAL REFERENCE.** TO THE EXTENT PERMITTED BY LAW, IN  CONNECTION WITH ANY CLAIM, CAUSE OF ACTION, PROCEEDING OR OTHER DISPUTE  CONCERNING THE LOAN DOCUMENTS (EACH A “CLAIM”), THE PARTIES TO THIS AGREEMENT  EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVE ANY RIGHT THAT EACH OF THEM  MAY OTHERWISE HAVE TO TRIAL BY JURY. IN THE EVENT THAT THE WAIVER OF  JURY TRIAL SET FORTH IN THE PREVIOUS SENTENCE IS NOT ENFORCEABLE UNDER THE  LAW APPLICABLE TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT AGREE THAT  ANY CLAIM, INCLUDING ANY QUESTION OF LAW OR FACT RELATING THERETO, SHALL, AT  THE WRITTEN REQUEST OF ANY PARTY, BE DETERMINED BY JUDICIAL REFERENCE  PURSUANT TO THE STATE LAW APPLICABLE TO THIS AGREEMENT. THE PARTIES                                                                                          |

 

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|   |       | SHALL SELECT A SINGLE  NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL JUDGE. IN THE EVENT  THAT THE PARTIES CANNOT AGREE UPON A REFEREE, THE COURT SHALL APPOINT THE  REFEREE. THE REFEREE SHALL REPORT A STATEMENT OF DECISION TO THE COURT.  NOTHING IN THIS SECTION 16  SHALL LIMIT THE RIGHT OF ANY PARTY AT ANY TIME TO EXERCISE SELF-HELP  REMEDIES, FORECLOSE AGAINST COLLATERAL OR OBTAIN PROVISIONAL REMEDIES. THE  PARTIES SHALL BEAR THE FEES AND EXPENSES OF THE REFEREE EQUALLY, UNLESS THE  REFEREE ORDERS OTHERWISE. THE REFEREE SHALL ALSO DETERMINE ALL ISSUES  RELATING TO THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS SECTION 16. THE PARTIES  ACKNOWLEDGE THAT IF A REFEREE IS SELECTED TO DETERMINE THE CLAIMS, THEN THE  CLAIMS WILL NOT BE DECIDED BY A JURY. |
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|   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 17.    | ** ** | **Counterparts.** This Guaranty may be executed in any  number of counterparts, which shall, collectively and separately, constitute  one agreement. Delivery of an executed counterpart of a signature  page hereto by facsimile transmission shall be effective as delivery of  a manually executed counterpart thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

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Executed as of the datefirst written above, Guarantor acknowledges having received a copy of thisGuaranty and having made each waiver contained in this Guaranty with fullknowledge and consequences.

 

 
| “Bank”:                |                         |                                         | “Guarantor”: |
|----------------------------------|------------------------------|----------------------------------------------|------------------------|
|                             |                         |                                         |                   |
| UNION BANK OF  CALIFORNIA, N.A., |                         | SMURFIT-STONE CONTAINER    ENTERPRISES, INC. |
|                             |                         |                                         |
|                             |                         |                                         |                   |
| By:                              |   /s/ Shawn Lipman |                                         | By:                    | /s/ Charles A.  Hinrichs_ |
|                             |                         |                                         |                   |   |   |
| Name:                            |   Shawn Lipman     |                                         | Name:                  |      Charles  A. Hinrichs |
|                             |                         |                                         |                   |   |
| Title:                           |   Vice President   |                                         | Title:                 | Senior Vice  President & Chief Financial |
|                             |                         |                                         |                   | Officer |
|                                  |                              |                                              |                        |  |  |  |

 
| Addresses for Notices:               |   | Addresses for Notices:                         |
|--------------------------------------|--------|------------------------------------------------|
|                                 |   |                                           |
| Union Bank of  California, N.A.      |   | Smurfit-Stone Container Enterprises, Inc. |
| 445 South Figueroa  Street, G13-300  |   | Six CityPlace Drive                            |
| Los Angeles, California  90071       |   | Creve Coeur, MO 63141                          |
| Attn: Commercial  Finance Division   |   | Attn: Charles A. Hinrichs                      |
| Telephone No.: (213)  236-5301       |   | Telephone No.: (314) 656-5276                  |
| Facsimile No.: (213)  236-6089       |   | Facsimile No.: (314) 787-6162                  |
|                                 |   |                                           |
| with a copy to:                      |   | with a copy to:                                |
|                                 |   |                                           |
| McDermott  Will & Emery LLP |   | Winston & Strawn LLP                  |
| 2049 Century Park East,  38th Floor  |   | 35 W. Wacker Drive                             |
| Los Angeles, CA 90067                |   | Chicago, IL 60601                              |
| Attn: Gary B.  Rosenbaum, Esq.  |   | Attn: Brian S. Hart                            |
| Telephone No.: (310)  284-6133       |   | Telephone No.: (312) 668-5702                  |
| Facsimile No.: (310)  277-4730       |   | Facsimile No.: (312) 558-5700                  |

 

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