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EXHIBIT 10.17
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
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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
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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 other party to Agent or any
Bank is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason Agent or any Bank is required to
refund any payment or pay the amount thereof to someone else; (l) the
settlement or compromise of any of the Guaranteed Indebtedness; (m) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness; (n) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (o) the failure of Agent or any Bank to
sell any collateral securing any or all of the Guaranteed Indebtedness in a
commercially reasonable manner or as otherwise required by law; (p) any change
in the corporate existence, structure, or ownership of Borrower; (q) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower; (r) the unenforceability of all or any part of the
Guaranteed Indebtedness against Borrower by reason of the fact that the
Guaranteed Indebtedness exceeds the amount permitted by law; (s) the act of
creating all or any part of the Guaranteed Indebtedness is ultra xxxxx; or (t)
the officers creating all or any part of the Guaranteed Indebtedness acted in
excess of their authority.
8. Guarantor hereby represents and warrants to Agent and the Banks
the following:
(a) This Guaranty may reasonably be expected to benefit, directly
or indirectly, Guarantor.
(b) Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of Borrower and
is familiar with the value of any and all collateral intended to be
security for the payment of all or any part of the Guaranteed
Indebtedness. However, Guarantor is not relying on such financial
condition or collateral as an inducement to enter into this Guaranty.
(c) Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition of
Borrower, and Guarantor is not relying on Agent or the Banks to
provide such information to Guarantor either now or in the future.
(d) Guarantor has the power and authority to execute, deliver, and
perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and
performance of this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith do not and will not violate (i)
any agreement or instrument to which Guarantor is a party, or (ii) to
the best of Guarantor's knowledge, any law, rule, regulation, or order
of any Governmental Authority to which Guarantor is subject.
(e) Neither Agent nor the Banks has made any representation,
warranty, or statement to Guarantor in order to induce Guarantor to
execute this Guaranty.
(f) The financial statements and other financial information
regarding Guarantors heretofore and hereafter delivered to Agent or
any Bank are and shall be true and correct in all material respects
and fairly present the financial position of Guarantor as of the dates
thereof, and no
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material adverse change has occurred in the financial condition of
Guarantor as reflected in those financial disclosures.
(g) As of the date hereof, and after giving effect to this
Guaranty, including without limitation, all rights of contribution and
subrogation, and the obligations evidenced hereby, (i) Guarantor is
and will be solvent (to the extent necessary, taking into account any
rights of contribution, reimbursement and subrogation), (ii) the fair
saleable value of Guarantor's assets exceeds and will continue to
exceed its liabilities (both fixed and contingent), (iii) Guarantor is
and will continue to be able to pay its debts as they mature, and (iv)
Guarantor has and will continue to have sufficient capital to carry on
its business and all businesses in which it is about to engage.
(h) All representations and warranties about Guarantor made in the
Credit Agreement are true and correct.
9. Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Bank has any Commitment
under the Credit Agreement:
(a) Guarantor shall not, so long as its obligations under
this Guaranty continue, transfer or pledge any material portion of its
assets for less than full and adequate consideration.
(b) Guarantor shall promptly furnish to Agent at any time
and from time to time such financial statements and other financial
information as required by the Credit Agreement or as Agent may
otherwise reasonably require, in form and substance satisfactory to
Agent.
(c) Guarantor shall comply with all terms and provisions
of the Loan Papers that apply to Guarantor.
(d) Guarantor shall promptly inform Agent of (i) any
litigation or governmental investigation against Guarantor or
affecting any security for all or any part of the Guaranteed
Indebtedness or this Guaranty which, if determined adversely, might
have a material adverse effect upon the financial condition of
Guarantor or upon such security or might cause a default under any of
the Loan Papers, (ii) any material claim or controversy which might
become the subject of such litigation or governmental investigation,
and (iii) any material adverse change in the financial condition of
Guarantor.
10. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (hereinafter defined) shall be subordinate and junior in right of
payment to the prior payment in full of all Guaranteed Indebtedness, and
Guarantor hereby assigns the Subordinated Indebtedness to Agent, for the
benefit of the Banks, as security for the Guaranteed Indebtedness. If any sums
shall be paid to Guarantor by Borrower or any other person or entity on account
of the Subordinated Indebtedness, such sums shall be held in trust by Guarantor
for the benefit of Agent and shall forthwith be paid to Agent without affecting
the liability of Guarantor under this Guaranty and may be applied by Agent and
the Banks against the Guaranteed Indebtedness in such order and manner as Agent
and the Banks may determine in their sole discretion. Upon the request of
Agent, Guarantor shall execute, deliver, and endorse to Agent such documents
and instruments as Agent may reasonably request to perfect, preserve, and
enforce its rights hereunder. For purposes of this Guaranty, the term
"SUBORDINATED INDEBTEDNESS" means all indebtedness, liabilities, and
obligations of Borrower to Guarantor, whether such indebtedness, liabilities,
and obligations now exist or are hereafter incurred or arise, or whether the
obligations of Borrower thereon are direct, indirect,
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contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such indebtedness, liabilities, or obligations are
evidenced by a note, contract, open account, or otherwise, and irrespective of
the person or persons in whose favor such indebtedness, obligations, or
liabilities may, at their inception, have been, or may hereafter be created, or
the manner in which they have been or may hereafter be acquired by Guarantor.
(b) Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon Borrower's assets securing
payment of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of Guarantor or Agent presently exist or are hereafter created or
attached. Without the prior written consent of the Banks, Guarantor shall not
(i) file suit against Borrower or exercise or enforce any other creditor's
right it may have against Borrower, or (ii) foreclose, repossess, sequester, or
otherwise take steps or institute any action or proceedings, judicial or
otherwise, including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding, to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Agent shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments
made in respect of the Subordinated Indebtedness. Agent and the Banks may
apply any such dividends, distributions, and payments against the Guaranteed
Indebtedness in such order and manner as Agent and the Banks may determine in
their sole discretion.
(d) Guarantor agrees that all promissory notes or any other
document evidencing Subordinated Indebtedness shall contain a specific written
notice thereon that the indebtedness evidenced thereby is subordinated under
the terms of this Guaranty.
11. Guarantor waives (a) promptness, diligence, and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness, or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand, notice
of protest, notice of intent to accelerate, notice of acceleration, notice of
dishonor, diligence in enforcement, and indulgences of every kind, and (b) the
taking of any other action by Agent, including without limitation, giving any
notice of default or any other notice to, or making any demand on, Borrower,
any other guarantor of all or any part of the Guaranteed Indebtedness or any
other party.
12. In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives and releases all
claims, causes of action, defenses and offsets for any act or omission of
Agent, its directors, officers, employees, representatives or agents in
connection with Agent's administration of the Guaranteed Indebtedness, except
for Agent's willful misconduct and gross negligence.
13. This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of all or any part of the
Guaranteed Indebtedness is rescinded or must otherwise be returned by Agent or
any Bank upon the insolvency, bankruptcy, or reorganization of Borrower,
Guarantor, any other guarantor of all or any part of the Guaranteed
Indebtedness, or otherwise, all as though such payment had not been made.
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14. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by Borrower or others (including
Guarantor), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of Guarantor against Agent or any Bank shall
have commenced to run, toll the running of such statute of limitations and, if
the period of such statute of limitations shall have expired, prevent the
operation of such statute of limitations.
15. This Guaranty is for the benefit of Agent and the Banks and
their respective successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding not only on
Guarantor, but on Guarantor's successors and assigns.
16. Guarantor recognizes that Agent and the Banks are relying upon
this Guaranty and the undertakings of Guarantor hereunder in making extensions
of credit to Borrower under the Credit Agreement and further recognizes that
the execution and delivery of this Guaranty is a material inducement to Agent
and the Banks in entering into the Credit Agreement. Guarantor hereby
acknowledges that there are no conditions to the full effectiveness of this
Guaranty.
17. This Guaranty is a Loan Paper and, therefore, this Guaranty is
subject to the applicable provisions of the Credit Agreement, all of which
applicable provisions are incorporated herein by reference the same as if set
forth herein verbatim. Moreover, Guarantor acknowledges and agrees that this
Guaranty is subject to the offset provisions in favor of the Banks in the
Credit Agreement.
18. Guarantor expressly assumes all responsibilities to remain
informed of the financial condition of Borrower and any circumstances affecting
(a) Borrower's ability to perform under the Credit Agreement and the other Loan
Papers to which it is a party or (b) any collateral securing all or any part of
the Guaranteed Indebtedness.
19. In the event that Guarantor is entitled to receive any notice
under the Uniform Commercial Code, as it exists in the state governing any such
notice, of the sale or other disposition of any collateral securing all or any
part of the Guaranteed Indebtedness or this Guaranty, reasonable notice shall
be deemed given when such notice is deposited in the United States mail,
postage prepaid, at the address for Guarantor set forth on the signature page
of this Guaranty, ten days prior to the date any public sale, or after which
any private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
20. No delay on the part of Agent in exercising any right
hereunder or failure to exercise the same shall operate as a waiver of such
right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by the appropriate parties
in accordance with the Credit Agreement, and then only in the specific instance
and for the purpose given.
21. Nothing contained herein shall be construed as an obligation
on the part of Agent or the Banks to extend or continue to extend credit to
Borrower.
22. Notwithstanding any other provision of this Guaranty or of any
instrument or agreement evidencing, governing or securing all or any part of
the Guaranteed Indebtedness, Guarantor and Agent by its acceptance hereof agree
that Guarantor shall never be required or obligated to pay interest in excess
of
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the maximum nonusurious interest rate as may be authorized by applicable law
for the written contracts which constitute the Guaranteed Indebtedness. It is
the intention of Guarantor, Agent, and the Banks to conform strictly to the
applicable laws which limit interest rates, and any of the aforesaid contracts
for interest, if and to the extent payable by Guarantors, shall be held to be
subject to reduction to the maximum nonusurious interest rate allowed under
said law.
23. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN INCIDENT TO A
LENDING TRANSACTION CONSUMMATED AND PERFORMABLE IN THE STATE OF TEXAS AND SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
24. Guarantor shall pay on demand all reasonable attorneys' fees
and all other costs and expenses incurred by Agent or any Bank in connection
with the enforcement or collection of this Guaranty.
25. THIS GUARANTY TOGETHER WITH THE OTHER LOAN PAPERS REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED as of the 15th day of September, 1997.
GUARANTOR:
SOUTHWEST TEXAS PACKAGED ICE, INC.,
a Texas corporation
By:
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Xxxxx X. Xxxxxx, Chief Executive Officer
Address for Notices:
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: X. X. Xxxxx, III
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
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