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EXHIBIT 10.14
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, MISSION PARTY 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 ▇▇▇▇▇; 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:
MISSION PARTY ICE, INC., a Texas corporation
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇, III
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
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