Exhibit 10.2


 


AMENDED AND RESTATED GUARANTY


 


THIS AMENDED AND RESTATED GUARANTY (this “Unlimited Guaranty”), dated as of July 28, 2008, made
by SMURFIT-STONE CONTAINER ENTERPRISES, INC.,
a corporation organized under the laws of the State of Delaware having its chief
executive office at 150 North Michigan Avenue, Chicago, IL  60601 (“Guarantor”) in favor of THE CIT GROUP/EQUIPMENT FINANCING, INC., as the initial
lender (the “Initial Lender”) and as
Administrative 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 Agent
and Initial Lender and such other financial institutions as may become parties
thereto from time to time (together with the Initial Lender, the “Lenders”), the Initial Lender made advances to Borrower in
the aggregate principal amount of $40,350,000.00 to finance the purchase and
installation of equipment for the manufacture of corrugated containers at
Borrower’s facility in Fresno, California (the “Manufacturing
Facility”), which advances were subsequently converted to a Term
Loan evidenced by that Term Note in favor of the Initial Lender effective as of
November 30, 2006;


 


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


 


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


 


WHEREAS,
during 2007 the Working Capital Lender (as defined in the Original Credit
Agreement) advised the Administrative Agent of the occurrence of certain “Events
of Default” (the “Revolver Defaults”)
under the Working Capital Loan Documents (as defined in the Original Credit
Agreement);


 


WHEREAS,
by letter dated November 30, 2007, the Administrative Agent notified the
Borrower and the Guarantor that certain Events of Default (collectively, the “Identified Defaults”) had occurred and were continuing under
the Original Credit Agreement, including breach of certain financial covenants
in the Original Credit Agreement and the existence of the Revolver Defaults;


 


WHEREAS,
the Borrower, the Administrative Agent, the Initial Lender and the Guarantor subsequently
entered into negotiations to restructure the Original Credit Agreement and
other Loan Documents, and pursuant to that Amendment No. 4 to Credit
Agreement, Reservation of Rights and Reaffirmation of Guaranty entered into as
of December 28, 2007, that Amendment No. 5 to Credit Agreement,
Reservation of Rights and Reaffirmation of Guaranty 


 

















 


entered into
as of January 31, 2008, and that Amendment No. 6 to Credit Agreement,
Reservation of Rights and Reaffirmation of Guaranty entered into as of February 29,
2008, the Borrower, the Administrative Agent, the Initial Lender and the
Guarantor further amended the Original Credit Agreement on the terms and
conditions set forth therein;


 


WHEREAS,
the Borrower has failed to make the principal payments 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 described on Schedule
1.01(a) to the Credit Agreement (as defined below), the “Existing Defaults”);


 


WHEREAS,
pursuant to that Amended and Restated Operating Agreement of Calpine
Corrugated, LLC (the “Calpine Operating
Agreement”) dated as of the Effective Date (as defined in the Credit
Agreement), the existing members of the Borrower and the Guarantor have
restructured the Borrower to, among other things, admit the Guarantor as a
Member (as defined in the Calpine Operating Agreement) owning a 90% Percentage
Interest (as defined in the Calpine Operating Agreement) in the Borrower;


 


WHEREAS,
the Borrower and the Guarantor have requested that the Administrative Agent and
the Initial Lender (i) waive the Existing Defaults and the right to
collect interest at the Default Rate (as defined in the Original Credit
Agreement) as a result of the Existing Defaults (ii) enter into an Amended
and Restated Credit Agreement (the “Credit Agreement”)
and (iii) otherwise amend the Loan Documents on the terms and subject to
the conditions set forth in the Credit Agreement, in consideration for which
the Guarantor has agreed to amend and restate the Original Guaranty to provide
a full guaranty of the Term Loan and all obligations of the Borrower under the
Credit Agreement;


 


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


 


WHEREAS, the Administrative Agent and the
Initial Lender are unwilling to waive the Existing Defaults and the collection
of interest at the Default Rate, to enter into the Credit Agreement and to otherwise
provide the concessions requested by the Borrower and Guarantor unless, among
other conditions, the Guarantor shall have executed and delivered this Unlimited
Guaranty in favor of the Administrative Agent (for the benefit of all
Beneficiaries); and


 


WHEREAS, the Guarantor, both through its
contractual relationships with the Borrower and as 90% owner of the Borrower, has
derived and will derive substantial economic benefit from the financing provided
by the Initial Lender to the Borrower pursuant to the Credit Agreement and will
derive substantial additional economic benefit from the Initial Lender’s
forbearance with respect to, and waiver of, the Existing Defaults and the other
concessions granted by the Initial Lender in acceding to the request of the
Borrower and the Guarantor to amend the Original Credit Agreement and the other
Loan Documents;


 

















 


NOW THEREFORE, in consideration of the
foregoing (all of which are incorporated as express representations and
covenants of Guarantor) and in order to induce the Initial Lender and the
Administrative Agent to waive the Existing Defaults and the right to collect
interest at the Default Rate as a result of the Existing Defaults and to
otherwise amend the Original Credit Agreement 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 as follows:


 


1.             Guarantor,
as a primary obligor, hereby unconditionally and irrevocably, guarantees to the
Beneficiaries that the Borrower will fully and promptly pay and perform all of
the Borrower’s obligations under the Credit Agreement and the other Loan
Documents as now in effect 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 the Term Loan (as defined in the Credit Agreement),
interest thereon, break costs contemplated therein, prepayment fees
contemplated therein, costs and expenses (including legal fees and
disbursements) of the Administrative Agent and the other Lenders that the Borrower
has agreed to bear thereunder, and payment and performance of all other obligations
of the Borrower thereunder (all of the foregoing are hereinafter referred to collectively
as the “Obligations”)
and that, if for any reason the Borrower shall fail to pay or perform any
Obligation, the Guarantor will promptly pay or perform the same without
limitation or condition.


 


2.             The
obligations of Guarantor under this Unlimited Guaranty shall be continuing,
absolute and unconditional under any and all circumstances and shall be paid
and performed by Guarantor regardless of (a) the invalidity or
unenforceability 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) any
impossibility, impracticably, frustration of purpose, illegality, force majeure
or 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 guaranty
of the Obligations at any time held by the Beneficiaries (or any of them); or (f) any
defense, offset or counterclaim which may at any time be available to or
asserted by the Borrower against the Beneficiaries (or any of them).


 


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


 


4.             Guarantor
waives (a) notice of acceptance of this Unlimited Guaranty and the
presentment, demand, protest and notice of non-payment or protest with respect
to any Obligation and any and all other demands and notices required by law; (b) any
and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution or any other claim which Guarantor may now or hereafter have
against the Borrower or any other person directly or contingently liable for
the Obligations or with respect to the Borrower’s property (including, without
limitation, property collateralizing the Obligations), arising from the
existence of this Unlimited Guaranty; (c) all exemptions; (d) all
setoffs and counterclaims; and (e) any duty on the part of any Beneficiary
(should such duty exist) to disclose to Guarantor any matter, fact or thing 


 

















 


related to the business operations or condition (financial or
otherwise) of the Borrower or its affiliates or property, whether now or
hereafter known by such Beneficiary.


 


5.             Guarantor
agrees that the Beneficiaries may at any time and from time to time, without
Guarantor’s consent and without notice to Guarantor and without affecting,
releasing or impairing any of Guarantor’s obligations hereunder, from time to
time, as the Beneficiaries may deem advisable, do any of the following (a) renew,
grant time, extend, modify, release or discharge any of the Obligations
(including extensions beyond the original term thereof) or of any other party
at any time directly or contingently liable for the payment thereof; (b) accept
partial payments of the Obligations; (c) settle, release (by operation of
law or otherwise), compound, compromise, collect or liquidate any Obligation and
any collateral security therefor in any manner; (d) consent to the
transfer or return of any collateral security, or take and hold additional
security or guaranties, for any Obligation; (e) bid and purchase at any
sale of collateral security for any Obligation, and direct the order and manner
of any sale.


 


6.             This
Unlimited Guaranty is an unconditional guarantee of payment and performance.


 


7.             A
waiver by any Beneficiary of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which such Beneficiary
or any other Beneficiary would otherwise have on any future occasion.  Neither failure to exercise nor any delay on the
part of any Beneficiary in exercising any right or remedy hereunder shall
operate as a waiver thereof.  The rights
and remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.


 


8.             If
a claim is made upon any Beneficiary at any time for repayment or recovery of
any amount of other value received by such Beneficiary from any source in
payment of or on account of any Obligations guaranteed hereunder and such
Beneficiary repays or otherwise becomes liable for all or any part of such
claim by reason of (a) any judgment, decree or order of any court or
administrative body having competent jurisdiction; (b) any event or action
including the insolvency, bankruptcy or reorganization of the Borrower; or (c) any
settlement or compromise of any such claim, Guarantor shall remain liable to such
Beneficiary hereunder for the amount so repaid or for which such Beneficiary is
otherwise liable to the same extent as if such amount had never been received
by such Beneficiary.


 


9.             Any
and all amounts required to be paid by Guarantor hereunder shall be paid in
lawful money of the United States of America in accordance with the terms and
provisions hereof, without deductions for and free and clear of any and all
taxes, levies, duties, withholding or restrictions of any nature now or
hereafter imposed, levied, collected, withheld or assessed with respect to any
of the Obligations or this Unlimited Guaranty by any taxing authority of
competent jurisdiction (“Taxes”).  If any Taxes
are required to be deducted or withheld from any amount payable to any
Beneficiary under this Unlimited Guaranty, such amount payable shall be
increased to yield to such Beneficiary (after payment of all Taxes) the amount
specified to be paid hereunder.  Whenever
any 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
additional evidence of payment as such Beneficiary (through the Administrative
Agent) may reasonably require.


 


10.           Guarantor
specifically acknowledges that the specification of payment in United States
Dollars (“Dollars”) is of the essence.  Unrestricted, convertible and transferable
Dollars shall be the currency of account in the case of all payments pursuant
to or arising under this Unlimited Guaranty. 
The payment obligations of the Guarantor under this Unlimited Guaranty
shall not be discharged by an amount paid in another currency, whether pursuant
to a judgment or otherwise, to the extent that the amount so paid on prompt
conversion to Dollars under normal banking procedures does not yield the amount
of Dollars due under this Unlimited Guaranty. 
If, for the purpose of obtaining judgment in any court, it is necessary
to 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 Beneficiary
could, in accordance with normal banking procedures, purchase Dollars with the
Other Currency on the business day immediately preceding the date on which
final judgment is given in such court.  The
obligation of the Guarantor in respect to any such sum due from it to any
Beneficiary hereunder shall, notwithstanding any judgment in such Other Currency,
be discharged only to the extent that, on the business day immediately
following the date on which such Beneficiary receives any sum adjudged to be so
due in the Other Currency, such Beneficiary may, in accordance with normal
banking procedures, purchase dollars with the Other Currency.  If the dollars so purchased are less than the
sum originally due to such Beneficiary in dollars, the Guarantor agrees as a
separate obligation and notwithstanding any such judgment, to indemnify such
Beneficiary against such loss, and if the dollars so purchased exceed the sum
originally due to such Beneficiary in dollars, such Beneficiary (through the
Administrative Agent) will promptly remit to the Guarantor such excess.


 


11.           This
Unlimited Guaranty shall be governed by, and construed in all respects in
accordance with, the internal laws of the State of Arizona, without regard to
any conflicts of law principles that may mandate the application of the laws of
any other jurisdiction.  Guarantor hereby
irrevocably consents and agrees that any legal action, suit or proceeding
arising out of or in any way connected with this Unlimited Guaranty may be
instituted or brought against Guarantor in the courts of the State of Arizona,
in the county of Maricopa, or the United States courts as the Administrative
Agent or any other Beneficiary may elect, and, by execution and delivery of
this Unlimited Guaranty, Guarantor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of any such court, and to all proceedings in
such courts, and agrees to be bound by any judgment thereof.  Guarantor hereby waives any right to a trial
by jury in any action or proceeding relating to or connection with this Unlimited
Guaranty.  Nothing in this Unlimited
Guaranty shall affect or limit the right to effect service of process in any
other manner permitted by law or limit the right 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 judgment against it in any such legal action, suit or
proceeding shall be conclusive and may be enforced in any other jurisdiction,
within or without the United States, by suit on the judgment, certified or
exemplified copy of which shall be conclusive evidence of the fact and amount
of liability.


 


12.           To
the extent that the Guarantor or the Borrower or any of their respective
properties, assets or revenues may have or may hereafter become entitled to, or
have attributed to 


 

















 


it, any right of immunity, on the grounds of sovereignty or otherwise,
from any legal action, suit or proceeding, from the giving of any relief in any
thereof, from setoff or counterclaim, from the jurisdiction of any court, from
service or process, from attachment upon or prior to judgment, from attachment
in aid of execution of judgment, or from execution of judgment, or other legal
process or proceeding from the giving of any relief or for the enforcement of
any judgment, in any jurisdiction in which proceedings may at any time be
commenced, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Unlimited Guaranty, the
Guarantor hereby irrevocably and unconditionally waives, and agrees not to
plead or claim, any such immunity and consents to such relief and enforcement.


 


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


 


14.           This
Unlimited Guaranty shall bind the respective representatives, successors and
assigns of Guarantor and each Beneficiary and shall inure to the benefit of the
successors and assigns of each Beneficiary. 
The invalidity, illegality or unenforceability of any other provision of
this Unlimited Guaranty shall not affect the validity, legality or
enforceability of any other provision of this Unlimited Guaranty.  This Unlimited Guaranty shall be governed by,
and be construed in accordance with, the laws of the State of Arizona.  None of the terms or provisions of this Unlimited
Guaranty may be amended, waived or modified except by a writing signed by the
party against which enforcement of such amendment, waiver or modification is
sought.


 


15.           The
rights of each Beneficiary under this Unlimited Guaranty may, subject to the
terms and conditions set forth in the Credit Agreement (including notice to the
Administrative Agent, or in the case of an assignment by the Administrative
Agent, subject to the provisions thereof relating to the replacement of the
Administrative Agent), be assigned by such Beneficiary without prior consent of
the Borrower or the Guarantor.  The
Guarantor may not assign its obligations under this Unlimited Guaranty.


 


16.           All notices, requests and demands to or upon the
respective parties hereto shall be in writing and shall be deemed to have been
given or made when delivered to the party 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


 


If to the
Administrative Agent or any other Beneficiary:


 


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 expressly covenants and agrees that, if at any time Guarantor ceases
to file periodic reports with the Securities and Exchange Commission pursuant
to the Securities and Exchange Act of 1934 and the regulations promulgated
thereunder, then Guarantor shall promptly deliver to Administrative Agent
copies of (i) all notices, requests and other documents received by
Guarantor or any of its Subsidiaries under or pursuant to the Credit Agreement
dated as of November 1, 2004 among Guarantor, Smurfit Stone Container
Corporation, Smurfit-Stone Container Canada, Inc., JPMorgan Chase Bank, as
Senior Agent, Deutsche Bank Trust Company Americas, as Senior Agent and
Administrative Agent, Deutsche Bank AG, as Canadian Administrative Agent, and
the lenders party thereto or any of the “Loan Documents” as defined therein
regarding any event that could materially impair the value of the interests or
the rights of any Loan Party or otherwise have a Material Adverse Effect, (ii) any
amendment, modification or waiver of any provision of any document described in
clause (i) above, and (iii) from time to time, such information and
reports regarding the documents described in clause (i) above as the
Administrative Agent may reasonably request.


 


[SIGNATURE PAGE FOLLOWS.]


 

















 


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


 


	
   

  	
  SMURFIT-STONE CONTAINER

  ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles
  A. Hinrichs

  
	
   

  	
   

  
	
   

  	
  Name:
  Charles A. Hinrichs

  
	
   

  	
   

  
	
   

  	
  Title:
  Senior Vice President and Chief

  Financial Officer

  



 


 


ACKNOWLEDGED
AND AGREED.


 


THE CIT
GROUP/EQUIPMENT FINANCING, INC.,

  as Administrative Agent


 


	
  By:

  	
  /s/ Raymond
  M. Crouse

  	
   

  
	
  Name:
  Raymond M. Crouse

  	
   

  
	
  Title:   Senior Vice President