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Subsidiary Guaranty Agreement Dated 9/15/97

This is an actual contract by Packaged Ice.

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Sectors: Food, Beverages and Tobacco
Governing Law: Texas, View Texas State Laws
Effective Date: September 15, 1997
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SUBSIDIARY GUARANTY AGREEMENT


WHEREAS, PACKAGED ICE, INC., a Texas corporation ("BORROWER"), has entered into a Credit Agreement of even date herewith with certain banks and other lending institutions which are or may from time to time become signatories thereto (each, a "BANK" and collectively, the "BANKS"), THE FROST NATIONAL BANK, a national banking association, as documentation and administrative agent for itself and the other Banks (in such capacity, together with its successors in such capacity, the "AGENT"), pursuant to which the Banks have agreed to make a revolving credit loan to Borrower with advances thereunder not to exceed an aggregate principal amount of Twenty Million and No/100 Dollars ($20,000,000.00) (such Credit Agreement, as same may be amended, extended, restated, supplemented or modified from time to time, the "CREDIT AGREEMENT"); terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined therein;


WHEREAS, Agent and the Banks have conditioned their obligations under the Credit Agreement upon the execution and delivery by Guarantor (hereinafter defined) of this Subsidiary Guaranty Agreement (this "GUARANTY");


NOW THEREFORE, for valuable consideration, including, without limitation, $100,000.00 cash paid by Borrower to Guarantor; any commitment to lend, extension of credit or other financial accommodation, whether heretofore or hereafter made by the Banks to Borrower; any extension, renewal or replacement of any Guaranteed Indebtedness, any forbearance with respect to any Guaranteed Indebtedness or otherwise; or any other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned, SOUTHWEST TEXAS PACKAGED ICE, INC., a Texas corporation ("GUARANTOR"), hereby irrevocably and unconditionally guarantees to Agent and to the Banks, the full and prompt payment and performance of the Guaranteed Indebtedness (hereinafter defined), this Guaranty being upon the following terms:


1. The term "GUARANTEED INDEBTEDNESS", as used herein means all of the Obligations and shall include any and all post-petition interest and reasonable expenses (including reasonable attorneys' fees) whether or not allowed under any bankruptcy, insolvency, or other similar law.


2. This Guaranty shall be an absolute, continuing, irrevocable, and unconditional guaranty of payment, and not a guaranty of collection, and Guarantor shall remain liable on its obligations hereunder until the payment in full of the Guaranteed Indebtedness and termination of the Commitments. No set-off, counterclaim, recoupment, reduction, or diminution of any obligation, or any defense of any kind or nature which Borrower may have against Agent, any Bank or any other party, or which Guarantor may have against Borrower or any other party (other than Agent or any Bank), shall be available to, or shall be asserted by, Guarantor against Agent, any Bank or any subsequent holder of the Guaranteed Indebtedness or any part thereof or against payment of the Guaranteed Indebtedness or any part thereof.


3. It is the intention of Guarantor, Agents and the Banks that the amount of the Guaranteed Indebtedness not exceed the maximum amount permitted by applicable laws, including fraudulent conveyance, fraudulent transfer or similar laws applicable to Guarantor. Accordingly, and notwithstanding anything to the contrary in this Guaranty, any Loan Paper, or any other agreement or instrument executed in connection with the payment of any of the Guaranteed Indebtedness, if, after giving effect to this Guaranty and applicable laws, the obligations of Guarantor under this Guaranty would otherwise be set aside, terminated, annulled or avoided for such reason by a court of competent jurisdiction in a proceeding


STPI SUBSIDIARY GUARANTY AGREEMENT 2 actually pending before such court, the amount of the Guaranteed Indebtedness shall be limited to the maximum amount permitted by applicable laws which would not (a) render Guarantor insolvent, (b) result in the fair saleable value of Guarantor's assets being less than the amount required to pay its debts and other liabilities (including contingent liabilities) as they mature, or (c) leave Guarantor with unreasonably small capital to carry out its business as conducted prior to the execution of this Guaranty and as proposed to be conducted, including its capital needs.


4. If Guarantor becomes liable for any indebtedness owing by Borrower to Agent or any Bank by endorsement or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Agent and the Banks hereunder shall be cumulative of any and all other rights that Agent and the Banks may ever have against Guarantor. The exercise by Agent or any Bank of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.


5. In the event of default by Borrower in payment or performance of the Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness becomes due, whether by its terms, by acceleration, or otherwise, Guarantor shall promptly pay the amount due thereon to Agent, for the benefit of the Banks, upon written demand therefor delivered to Guarantor, in lawful currency of the United States of America and it shall not be necessary for Agent, in order to enforce such payment by Guarantor, first to institute suit or exhaust its remedies against Borrower or others liable on such Guaranteed Indebtedness, or to enforce any rights against any collateral which shall ever have been given to secure such Guaranteed Indebtedness.


6. If acceleration of the time for payment of any amount payable by Borrower under the Guaranteed Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be payable by Guarantor hereunder forthwith on written demand therefor delivered to Guarantor by Agent.


7. Guarantor hereby agrees that its obligations under this Guaranty shall not be released, discharged, diminished, impaired, reduced, or affected for any reason or by the occurrence of any event, including, without limitation, one or more of the following events, whether or not with notice to or the consent of Guarantor: (a) the taking or accepting of collateral as security for any or all of the Guaranteed Indebtedness or the sale, release, surrender, exchange, or subordination of any collateral now or hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial release of the liability of Guarantor hereunder, or the full or partial release of Borrower or any other guarantor from liability for any or all of the Guaranteed Indebtedness; (c) the dissolution, insolvency, or bankruptcy of Borrower, Guarantor, or any other party at any time liable for the payment of any or all of the Guaranteed Indebtedness; (d) any renewal, extension, modification, waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness or any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, settlement, or compromise that may be granted or given by Agent or any Bank to Borrower, Guarantor, or any other party ever liable for any or all of the Guaranteed Indebtedness; (f) the subordination of the payment of all or any part of the Guaranteed Indebtedness to the payment of any obligations, indebtedness, or liabilities which may be due or become due to Agent, any of the Banks or others; (g) the application of any deposit balance, fund, payment, collections through process of law or otherwise, or other collateral of Borrower to the satisfaction and liquidation of the indebtedness or obligations of Borrower to Agent or any of the Banks, if any, not guaranteed under this Guaranty; (h) the application of any sums paid to Agent or any of the Banks by Guarantor, any other guarantor of all or any part of the Guaranteed Indebtedness, Borrower or others to the


STPI SUBSIDIARY GUARANTY AGREEMENT
2 3 Guaranteed Indebtedness in such order and manner as Agent may determine in accordance with the Credit Agreement; (i) any neglect, delay, omission, failure, or refusal of Agent or any Bank to take or prosecute any action for the collection of any of the Guaranteed Indebtedness or to foreclose or take or prosecute any action in connection with any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (j) the unenforceability or invalidity of any or all of the Guaranteed Indebtedness or of any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (k) any payment by Borrower or any oth
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