**EXHIBIT10.1**

** **

**AMENDED AND RESTATEDGUARANTY**

** **

**THIS AMENDED AND RESTATEDGUARANTY**(this **“Unlimited Guaranty”**), dated as of July 28, 2008, madeby **SMURFIT-STONE CONTAINER ENTERPRISES, INC.**,a corporation organized under the laws of the State of Delaware having itschief executive office at 150 North Michigan Avenue, Chicago, IL  60601 (“**Guarantor**”) in favor of **THE CIT GROUP/EQUIPMENT FINANCING, INC**., as the initiallender (the **“Initial Lender”**) and asAdministrative Agent for the benefit of the Lenders (as defined below) (the “**Administrative Agent**”and together with the Lenders, the “**Beneficiaries**”).

 

**WHEREAS,** pursuant to that Credit Agreement dated as of March 30,2006 (as subsequently amended, the **“Original Credit Agreement”**),by and between Calpine Corrugated, LLC (formerly known as Produce Container,LLC (the “**Borrower”**) and the Administrative Agentand Initial Lender and such other financial institutions as may become partiesthereto from time to time (together with the Initial Lender, the “**Lenders”**), the Initial Lender made advances to Borrower inthe aggregate principal amount of $40,350,000.00 to finance the purchase andinstallation of equipment for the manufacture of corrugated containers atBorrower’s facility in Fresno, California (the**“ManufacturingFacility”**), which advances were subsequently converted to a TermLoan evidenced by that Term Note in favor of the Initial Lender effective as ofNovember 30, 2006;

 

**WHEREAS,** pursuant to that Guaranty dated as of March 30,2006 (the **“Original Guaranty**”), the Guarantorprovided a limited guaranty of the obligations of Borrower under the OriginalCredit Agreement;

 

**WHEREAS,** the Borrower, the Administrative Agent and theInitial Lender thereafter amended the Original Credit Agreement in certainrespect pursuant to that Amendment No. 1 to Credit Agreement entered intoas of October 30, 2006, that letter agreement denominated Amendment No. 2to Credit Agreement dated November 30, 2006, and that Amendment No. 2*[sic]*to Credit Agreement entered intoas April 23, 2007;

 

**WHEREAS,** during 2007 the Working Capital Lender (as defined inthe Original Credit Agreement) advised the Administrative Agent of theoccurrence of certain “Events of Default” (the “**RevolverDefaults**”) under the Working Capital Loan Documents (as defined inthe Original Credit Agreement);

 

**WHEREAS,** by letter dated November 30, 2007, theAdministrative Agent notified the Borrower and the Guarantor that certainEvents of Default (collectively, the “**Identified Defaults**”)had occurred and were continuing under the Original Credit Agreement, includingbreach of certain financial covenants in the Original Credit Agreement and theexistence of the Revolver Defaults;

 

**WHEREAS,** the Borrower, the Administrative Agent, the InitialLender and the Guarantor subsequently entered into negotiations to restructurethe Original Credit Agreement and other Loan Documents, and pursuant to thatAmendment No. 4 to Credit Agreement, Reservation of Rights andReaffirmation of Guaranty entered into as of December 28, 2007, that AmendmentNo. 5 to Credit Agreement, Reservation of Rights and Reaffirmation ofGuaranty entered into as of January 31, 2008, and that Amendment No. 6to Credit Agreement, Reservation of Rights and Reaffirmation of Guarantyentered into as of February 29, 2008, the Borrower, the AdministrativeAgent, the Initial Lender and the Guarantor further amended the Original CreditAgreement on the terms and conditions set forth therein;

 

**WHEREAS,** the Borrower has failed to make the principalpayments due under the Original Credit Agreement as of March 14, April 14,May 14 and June 14, 2008 (the “**Payment Defaults,**”and collectively with the Identified Defaults and any other Defaults describedon Schedule 1.01(a) to the Credit Agreement (as defined below), the**“Existing Defaults**”);

 

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**WHEREAS,** pursuant to that Amended and Restated OperatingAgreement of Calpine Corrugated, LLC (the **“Calpine OperatingAgreement”**) dated as of the Effective Date (as defined in the CreditAgreement), the existing members of the Borrower and the Guarantor haverestructured the Borrower to, among other things, admit the Guarantor as aMember (as defined in the Calpine Operating Agreement) owning a 90% PercentageInterest (as defined in the Calpine Operating Agreement) in the Borrower;

 

**WHEREAS,** the Borrower and the Guarantor have requested thatthe Administrative Agent and the Initial Lender (i) waive the ExistingDefaults and the right to collect interest at the Default Rate (as defined inthe Original Credit Agreement) as a result of the Existing Defaults (ii) enterinto an Amended and Restated Credit Agreement (the “**CreditAgreement**”) and (iii) otherwise amend the Loan Documents on theterms and subject to the conditions set forth in the Credit Agreement, inconsideration for which the Guarantor has agreed to amend and restate theOriginal Guaranty to provide a full guaranty of the Term Loan and allobligations of the Borrower under the Credit Agreement;

 

**WHEREAS,** the Borrower, the Administrative Agent, the InitialLender and the Guarantor have agreed that, on the Effective Date, the OriginalCredit Agreement, the Term Note and the Original Guaranty will each be amendedand restated in its entirety, and other Loan Documents will be further amendedin certain respects, in each case as provided in, and on and subject to theterms and conditions set forth in, the Credit Agreement;

 

**WHEREAS,** the Administrative Agent and the Initial Lender areunwilling to waive the Existing Defaults and the collection of interest at theDefault Rate, to enter into the Credit Agreement and to otherwise provide theconcessions requested by the Borrower and Guarantor unless, among otherconditions, the Guarantor shall have executed and delivered this UnlimitedGuaranty in favor of the Administrative Agent (for the benefit of allBeneficiaries); and

 

**WHEREAS,** the Guarantor, both through its contractualrelationships with the Borrower and as 90% owner of the Borrower, has derivedand will derive substantial economic benefit from the financing provided by theInitial Lender to the Borrower pursuant to the Credit Agreement and will derivesubstantial additional economic benefit from the Initial Lender’s forbearancewith respect to, and waiver of, the Existing Defaults and the other concessionsgranted by the Initial Lender in acceding to the request of the Borrower andthe Guarantor to amend the Original Credit Agreement and the other LoanDocuments;

 

**NOW THEREFORE,** in consideration of the foregoing (all of which areincorporated as express representations and covenants of Guarantor) and inorder to induce the Initial Lender and the Administrative Agent to waive theExisting Defaults and the right to collect interest at the Default Rate as aresult of the Existing Defaults and to otherwise amend the Original CreditAgreement and the Loan Documents for the benefit of Borrower and Guarantor,Guarantor, for the benefit of the Administrative Agent and the Beneficiaries,hereby amends and restates the Original Guaranty in its entirety to read asfollows:

 

1.             Guarantor, as a primary obligor,hereby unconditionally and irrevocably, guarantees to the Beneficiaries thatthe Borrower will fully and promptly pay and perform all of the Borrower’sobligations under the Credit Agreement and the other Loan Documents as now ineffect or as the same may be modified, amended and/or restructured at any time,including, but not limited to, the obligation to repay the principal of theTerm Loan (as defined in the Credit Agreement), interest thereon, break costscontemplated therein, prepayment fees contemplated therein, costs and expenses(including legal fees and disbursements) of the Administrative Agent and theother Lenders that the Borrower has agreed to bear thereunder, and payment andperformance of all other obligations of the Borrower thereunder (all of theforegoing are hereinafter referred to collectively as the “**Obligations**”)and that, if for any reason the Borrower shall fail to pay or perform anyObligation, the Guarantor will promptly pay or perform the same withoutlimitation or condition.

 

2.             The obligations of Guarantor underthis Unlimited Guaranty shall be continuing, absolute and unconditional underany and all circumstances and shall be paid and performed by Guarantor 

 

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regardless of (a) the invalidity orunenforceability of any of the Obligations; (b) any change in the time,manner, place of payment or in any other term of any of the Obligations; (c) anyimpossibility, impracticably, frustration of purpose, illegality, force majeureor act of government; (d) the bankruptcy, winding up, liquidation,dissolution or insolvency of the Borrower; (e) the insufficiency,invalidity or unenforceability of any collateral security or any other guarantyof the Obligations at any time held by the Beneficiaries (or any of them); or (f) anydefense, offset or counterclaim which may at any time be available to orasserted by the Borrower against the Beneficiaries (or any of them).

 

3.             The Guarantor agrees, without theBeneficiaries first having to proceed against the Borrower or other person orto liquidate any collateral security for any Obligations, to pay on demand allObligations due and to become due to the Beneficiaries (or any of them) fromthe Borrower together with all losses, costs, attorneys’ fees or expenses theBeneficiaries (or any of them) may incur in enforcing its rights against theGuarantor hereunder.

 

4.             Guarantor waives (a) notice ofacceptance of this Unlimited Guaranty and the presentment, demand, protest andnotice of non-payment or protest with respect to any Obligation and any and allother demands and notices required by law; (b) any and all rights ofsubrogation, reimbursement, indemnity, exoneration, contribution or any otherclaim which Guarantor may now or hereafter have against the Borrower or anyother person directly or contingently liable for the Obligations or withrespect to the Borrower’s property (including, without limitation, propertycollateralizing the Obligations), arising from the existence of this UnlimitedGuaranty; (c) all exemptions; (d) all setoffs and counterclaims; and (e) anyduty on the part of any Beneficiary (should such duty exist) to disclose toGuarantor any matter, fact or thing related to the business operations orcondition (financial or otherwise) of the Borrower or its affiliates orproperty, whether now or hereafter known by such Beneficiary.

 

5.             Guarantor agrees that theBeneficiaries may at any time and from time to time, without Guarantor’sconsent and without notice to Guarantor and without affecting, releasing orimpairing any of Guarantor’s obligations hereunder, from time to time, as theBeneficiaries may deem advisable, do any of the following (a) renew, granttime, extend, modify, release or discharge any of the Obligations (includingextensions beyond the original term thereof) or of any other party at any timedirectly or contingently liable for the payment thereof; (b) acceptpartial payments of the Obligations; (c) settle, release (by operation oflaw or otherwise), compound, compromise, collect or liquidate any Obligationand any collateral security therefor in any manner; (d) consent to thetransfer or return of any collateral security, or take and hold additionalsecurity or guaranties, for any Obligation; (e) bid and purchase at anysale of collateral security for any Obligation, and direct the order and mannerof any sale.

 

6.             This Unlimited Guaranty is anunconditional guarantee of payment and performance.

 

7.             A waiver by any Beneficiary of anyright or remedy hereunder on any one occasion shall not be construed as a barto any right or remedy which such Beneficiary or any other Beneficiary wouldotherwise have on any future occasion. Neither failure to exercise nor any delay on the part of any Beneficiaryin exercising any right or remedy hereunder shall operate as a waiverthereof.  The rights and remedies hereinprovided are cumulative and may be exercised singly or concurrently, and arenot exclusive of any rights and remedies provided by law.

 

8.             If a claim is made upon anyBeneficiary at any time for repayment or recovery of any amount of other valuereceived by such Beneficiary from any source in payment of or on account of anyObligations guaranteed hereunder and such Beneficiary repays or otherwisebecomes liable for all or any part of such claim by reason of (a) anyjudgment, decree or order of any court or administrative body having competentjurisdiction; (b) any event or action including the insolvency, bankruptcyor reorganization of the Borrower; or (c) any settlement or compromise ofany such claim, Guarantor shall remain liable to such Beneficiary hereunder forthe amount so repaid or for which such Beneficiary is otherwise liable to thesame extent as if such amount had never been received by such Beneficiary.

 

9.             Any and all amounts required to bepaid by Guarantor hereunder shall be paid in lawful money of the United Statesof America in accordance with the terms and provisions hereof, without 

 

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deductions for and free and clear of any and alltaxes, levies, duties, withholding or restrictions of any nature now orhereafter imposed, levied, collected, withheld or assessed with respect to anyof the Obligations or this Unlimited Guaranty by any taxing authority ofcompetent jurisdiction (“**Taxes**”).  If any Taxesare required to be deducted or withheld from any amount payable to anyBeneficiary under this Unlimited Guaranty, such amount payable shall beincreased to yield to such Beneficiary (after payment of all Taxes) the amountspecified to be paid hereunder.  Wheneverany Taxes are paid by Guarantor on behalf of any Beneficiary, Guarantor shall,as promptly as possible, send such Beneficiary (through the Administrative Agent)an official receipt showing payment thereof, together with such additionalevidence of payment as such Beneficiary (through the Administrative Agent) mayreasonably require.

 

10.           Guarantor specifically acknowledgesthat the specification of payment in United States Dollars (“**Dollars**”) is of the essence. Unrestricted, convertible and transferable Dollars shall be the currencyof account in the case of all payments pursuant to or arising under thisUnlimited Guaranty.  The paymentobligations of the Guarantor under this Unlimited Guaranty shall not bedischarged by an amount paid in another currency, whether pursuant to ajudgment or otherwise, to the extent that the amount so paid on promptconversion to Dollars under normal banking procedures does not yield the amountof Dollars due under this Unlimited Guaranty. If, for the purpose of obtaining judgment in any court, it is necessaryto convert a sum due hereunder in Dollars into another currency (the “**Other Currency**”),the rate of exchange used shall be that at which the applicable Beneficiarycould, in accordance with normal banking procedures, purchase Dollars with theOther Currency on the business day immediately preceding the date on whichfinal judgment is given in such court. The obligation of the Guarantor in respect to any such sum due from itto any Beneficiary hereunder shall, notwithstanding any judgment in such OtherCurrency, be discharged only to the extent that, on the business dayimmediately following the date on which such Beneficiary receives any sumadjudged to be so due in the Other Currency, such Beneficiary may, inaccordance with normal banking procedures, purchase dollars with the OtherCurrency.  If the dollars so purchasedare less than the sum originally due to such Beneficiary in dollars, theGuarantor agrees as a separate obligation and notwithstanding any suchjudgment, to indemnify such Beneficiary against such loss, and if the dollarsso purchased exceed the sum originally due to such Beneficiary in dollars, suchBeneficiary (through the Administrative Agent) will promptly remit to theGuarantor such excess.

 

11.           This Unlimited Guaranty shall begoverned by, and construed in all respects in accordance with, the internallaws of the State of Arizona, without regard to any conflicts of law principlesthat may mandate the application of the laws of any other jurisdiction.  Guarantor hereby irrevocably consents andagrees that any legal action, suit or proceeding arising out of or in any wayconnected with this Unlimited Guaranty may be instituted or brought against Guarantorin the courts of the State of Arizona, in the county of Maricopa, or the UnitedStates courts as the Administrative Agent or any other Beneficiary may elect,and, by execution and delivery of this Unlimited Guaranty, Guarantor herebyirrevocably accepts and submits to the non-exclusive jurisdiction of any suchcourt, and to all proceedings in such courts, and agrees to be bound by anyjudgment thereof.  Guarantor herebywaives any right to a trial by jury in any action or proceeding relating to orconnection with this Unlimited Guaranty. Nothing in this Unlimited Guaranty shall affect or limit the right toeffect service of process in any other manner permitted by law or limit theright of the Administrative Agent or any other Beneficiary to bring actions,suits or proceedings in the court of any other jurisdiction.  Guarantor further agrees that final judgmentagainst it in any such legal action, suit or proceeding shall be conclusive andmay be enforced in any other jurisdiction, within or without the United States,by suit on the judgment, certified or exemplified copy of which shall beconclusive evidence of the fact and amount of liability.

 

12.           To the extent that the Guarantor orthe Borrower or any of their respective properties, assets or revenues may haveor may hereafter become entitled to, or have attributed to it, any right ofimmunity, on the grounds of sovereignty or otherwise, from any legal action,suit or proceeding, from the giving of any relief in any thereof, from setoffor counterclaim, from the jurisdiction of any court, from service or process,from attachment upon or prior to judgment, from attachment in aid of executionof judgment, or from execution of judgment, or other legal process orproceeding from the giving of any relief or for the enforcement of anyjudgment, in any jurisdiction in which proceedings may at any time becommenced, with respect to its obligations, liabilities or any other matterunder or arising out of or in 

 

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connection with this Unlimited Guaranty, the Guarantorhereby irrevocably and unconditionally waives, and agrees not to plead orclaim, any such immunity and consents to such relief and enforcement.

 

13.           This Unlimited Guaranty constitutesthe entire agreement between the Guarantor and the Beneficiaries with respectto the subject matter hereof and supersedes any prior understandings andagreements between such parties with respect thereto.  There are no representations, warranties,terms, conditions, understandings or collateral agreements, expressed, impliedor statutory between the parties other than as expressly set forth in thisUnlimited Guaranty.

 

14.           This Unlimited Guaranty shall bindthe respective representatives, successors and assigns of Guarantor and eachBeneficiary and shall inure to the benefit of the successors and assigns ofeach Beneficiary.  The invalidity,illegality or unenforceability of any other provision of this UnlimitedGuaranty shall not affect the validity, legality or enforceability of any otherprovision of this Unlimited Guaranty. This Unlimited Guaranty shall be governed by, and be construed inaccordance with, the laws of the State of Arizona.  None of the terms or provisions of thisUnlimited Guaranty may be amended, waived or modified except by a writingsigned by the party against which enforcement of such amendment, waiver ormodification is sought.

 

15.           The rights of each Beneficiary underthis Unlimited Guaranty may, subject to the terms and conditions set forth inthe Credit Agreement (including notice to the Administrative Agent, or in thecase of an assignment by the Administrative Agent, subject to the provisionsthereof relating to the replacement of the Administrative Agent), be assignedby such Beneficiary without prior consent of the Borrower or theGuarantor.  The Guarantor may not assignits obligations under this Unlimited Guaranty.

 

16.           All notices,requests and demands to or upon the respective parties hereto shall be inwriting and shall be deemed to have been given or made when delivered to theparty to whom it is addressed as follows:

 

If to Guarantor:

 
|   | Smurfit-Stone  Container Enterprises, Inc. |   |
|--------|-------------------------------------------------|--------|
|   | Six CityPlace  Drive                            |   |
|   | Creve Coeur, MO  63141                          |   |
|   | Attention:  Charles A. Hinrichs                 |   |
|   | Telephone:  314-656-5276                        |   |
|   | Facsimile: 314-787-6162                         |   |
|   | With a copy to:                                 |   |
|   |                                            |   |
|   | Winston &  Strawn LLP                  |   |
|   | 35 W. Wacker  Drive                             |   |
|   | Chicago, IL  60601                              |   |
|   | Attention: Brian  S. Hart                       |   |
|   | Telephone:  312-558-5702                        |   |
|   | Facsimile:  312-558-5700                        |   |

 

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If to the Administrative Agent or any otherBeneficiary:

 
|   |   | The CIT Group/Equipment Financing, Inc., as  Administrative Agent |
|--------|--------|------------------------------------------------------------------------|
|   |   | 305 Fellowship Road                                                    |
|   |   | Suite 300                                                         |
|   |   | Mount Laurel, NJ 08054                                                 |
|   |   | Attention: Martin Healey                                               |
|   |   | Telephone: 856-813-2623                                                |
|   |   | Facsimile: 856-727-5203                                                |
|   |   |                                                                   |
|   |   | With a copy to:                                                        |
|   |   |                                                                   |
|   |   | The CIT Group/Equipment Financing, Inc                                 |
|   |   | 305 Fellowship Road                                                    |
|   |   | Suite 300                                                         |
|   |   | Mount Laurel, NJ 08054                                                 |
|   |   | Attention: Cole Silver                                                 |
|   |   | Telephone: 856-813-2696                                                |
|   |   | Facsimile: 856-813-2996                                                |

 

17.           Guarantor hereby further expresslycovenants and agrees that, if at any time Guarantor ceases to file periodicreports with the Securities and Exchange Commission pursuant to the Securitiesand Exchange Act of 1934 and the regulations promulgated thereunder, thenGuarantor shall promptly deliver to Administrative Agent copies of (i) allnotices, requests and other documents received by Guarantor or any of itsSubsidiaries under or pursuant to the Credit Agreement dated as of November 1,2004 among Guarantor, Smurfit Stone Container Corporation, Smurfit-StoneContainer Canada, Inc., JPMorgan Chase Bank, as Senior Agent, DeutscheBank Trust Company Americas, as Senior Agent and Administrative Agent, DeutscheBank AG, as Canadian Administrative Agent, and the lenders party thereto or anyof the “Loan Documents” as defined therein regarding any event that couldmaterially impair the value of the interests or the rights of any Loan Party orotherwise have a Material Adverse Effect, (ii) any amendment, modificationor waiver of any provision of any document described in clause (i) above,and (iii) from time to time, such information and reports regarding thedocuments described in clause (i) above as the Administrative Agent mayreasonably request.

 

[SIGNATURE PAGE FOLLOWS.]

 

**IN WITNESS WHEREOF** the Guarantor has executed this Unlimited Guaranty asof the day and year first above written.

 

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| ** ** | ** ** | **SMURFIT-STONE  CONTAINER   ENTERPRISES, INC.**                               |
|------------|------------|--------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                     |
| ** ** | ** ** | ** **                                                                     |
| ** ** | ** ** | By:                                                                            | /s/ Charles A. Hinrichs |
| ** ** | ** ** |                                                                           |   |
|       |       | Name:   Charles A. Hinrichs                                          |
|       |       |                                                                           |
|       |       | Title:   Senior Vice President &  Chief Financial   Officer |

 

 

ACKNOWLEDGED AND AGREED.

 

THE CIT GROUP/EQUIPMENT FINANCING, INC.,

  asAdministrative Agent

 
| By:                                  | /s/ Raymond M. Crouse |   |
|--------------------------------------|-----------------------|--------|
| Name:   Raymond  M. Crouse |
| Title:  Senior  Vice President  |

 

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