Document:

Exhibit 10.3

 

OVERLAND
STORAGE, INC.

 

SUMMARY
SHEET

OF

DIRECTOR
AND EXECUTIVE OFFICER COMPENSATION

 

Non-Employee Director Compensation

 

Our compensation plan for non-employee directors
consists of both a cash component and an equity component. We pay each non-employee
director $5,000 per quarter, plus $2,500 for each Board meeting attended
($1,250 if held telephonically), plus reimbursement for expenses. The Chairman
of the Board receives an additional $2,500 per quarter in addition to the
non-employee director fee of $5,000 per quarter.  Members of the Audit
Committee and the Compensation Committee receive a retainer of $500 per quarter
in lieu of a fee for committee meetings attended during a quarter and members
of the Nominating and Governance Committee receive $500 for each committee
meeting attended ($250 if held telephonically and no fee if held the same day
as a Board meeting).

 

In addition to the cash component of compensation,
each non-employee director receives stock options.  Effective November 13,
2007, under our 2003 Equity Incentive Plan, which we refer to as the 2003
Incentive Plan, each non-employee director receives a six-year nonqualified
stock option to purchase 18,000 shares on the same date as the company’s annual
meeting of shareholders.  Prior to November 13, 2007, the
non-employee director options granted under the 2003 Incentive Plan had
ten-year terms. These options are exercisable at fair market value on the date
of grant and vest in equal monthly installments over a 12-month period, as
measured from the grant date.  When a new non-employee director joins the
board, such director will be awarded a new option for a number of shares
determined by multiplying 1,500 by the number of months remaining until the
next scheduled annual meeting date, giving credit for any partial month. 
Such option will vest at the rate of 1,500 shares per month and will be fully
vested at the next annual meeting date, at which time the director will receive
the normal annual grant.

 

On November 13, 2007, the date of our last
annual meeting of shareholders, Robert Degan, Nora Denzel, Eric Kelly, Bill
Miller, Scott McClendon and Michael Norkus each received an option for 18,000
shares.

 

Compensation of Executive Officers

 

Our executive officers serve at the discretion of
the Board of Directors. From time to time, the Compensation Committee of the
Board of Directors reviews and determines the salaries that are paid to our
executive officers. The following table sets forth the annual salary rates for
our current executive officers as of the date of this report:

 

	
  Vernon A.
  LoForti

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  Robert
  Farkaly

  	
   

  	
  $

  	
  280,000

  	
  *

  
	
  W. Michael
  Gawarecki

  	
   

  	
  $

  	
  246,500

  	
   

  
	
  Kurt L.
  Kalbfleisch

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Robert J.
  Scroop

  	
   

  	
  $

  	
  220,500

  	
   

  

 

* $140,000 of this amount is tied to performance and
is paid in the form of a sales commission.

 

Employment Arrangements with
Current Executive Officers

 

The following discussion summarizes the employment
arrangements between us and our current executive officers as of the date of
this report on Form 10-Q:

 

Robert Farkaly. As our Vice
President of Worldwide Sales, Mr. Farkaly is an at-will employee and may
be terminated by us for any reason, with or without notice. He currently earns
an annual salary of $280,000,
with $140,000 of that amount guaranteed as base salary and $140,000 tied to
performance. On August 13, 2007, he received an option to purchase up to
125,000 shares of our common stock at the purchase price of $1.62 per share
(the closing price of our common stock on the date of grant) pursuant to the
2003 Incentive Plan. The option will vest over one year in equal monthly
installments. The option will accelerate upon a “Change in Control” as defined
in the 2003 Incentive Plan.  The option has a three-year life, subject to
continuous service.

 

W. Michael Gawarecki. As our Vice President of Operations, Mr. Gawarecki
is an at-will employee and may be terminated by us for any reason, with or
without notice.  He currently earns an annual salary of $246,500. On August 13, 2007, he received an
option to purchase up to 100,000 shares of our common stock at the purchase
price 

 

 

of $1.62 per share (the closing price of our common
stock on the date of grant) pursuant to the 2003 Incentive Plan. The option
will vest over one year in equal monthly installments. The option will
accelerate upon a “Change in Control” as defined in the 2003 Incentive
Plan.  The option has a three-year life, subject to continuous service.

 

Kurt L. Kalbfleisch. As our Vice President of Finance and Interim Chief Financial Officer,
Mr. Kalbfleisch is an at-will employee and may be terminated by us for any
reason, with or without notice.  He currently earns an annual salary of
$200,000 per year and will earn cash bonuses of $10,000 each in October 2007,
January 2008, April 2008 and July 2008, subject to his continued
employment at our company at those times. On August 13, 2007, he received
an option to purchase up to 75,000 shares of the Company’s common stock at the
purchase price of $1.62 per share (the closing price of our common stock at the
purchase price of $1.62 per share (the closing price of our common stock on the
date of grant) pursuant to the 2003 Incentive Plan. The option will vest over
one year in equal monthly installments. The option will accelerate upon a “Change
in Control” as defined in the 2003 Incentive Plan.  The option has a
three-year life, subject to continuous service.

 

Vernon A. LoForti. In connection with his appointment as
President and Chief Executive Officer on August 7, 2007, Mr. LoForti’s
annual base salary was increased from $297,750 to $400,000. We entered into an
amended and restated employment agreement with Mr. LoForti on September 27,
2007. The amended and restated employment agreement has a one-year term,
automatically renews for successive one-year terms, and provides that our Board
may unilaterally modify Mr. LoForti’s compensation at any time.  If
we terminate Mr. LoForti’s employment without cause, then we are obligated
to pay him a severance payment equal to his base salary, payable on a pro-rated
basis according to our normal payroll cycle for the 12 months following
his termination. In addition, he is entitled to receive accelerated vesting for
any stock options that would otherwise have vested during the 12-month period
following his termination. He is also entitled to receive the cash severance
payment if he resigns for good reason because of any of the following events: (i) reduction
in compensation of more than 10%; (ii) change in position or duties so
that his duties are no longer consistent with his previous position; or (iii) change
in principal place of work to more than 50 miles from our current facility
without his approval.  On August 13, 2007, he received an option to
purchase up to 250,000 shares of our common stock at the purchase price of
$1.62 per share (the closing price of our common stock on the date of grant)
pursuant to the 2003 Incentive Plan. The option will vest over one year in
equal monthly installments. The option will accelerate upon a “Change in
Control” as defined in the 2003 Incentive Plan.  The option has a
three-year life, subject to continuous service.

 

Robert J. Scroop. As our Vice President, New Product Delivery, Mr. Scroop
is an at-will employee and may be terminated by us for any reason, with or
without notice.  Mr. Scroop currently earns an annual salary of
$220,500 per year. On August 13, 2007, he received an option to purchase
up to 75,000 shares of the Company’s common stock at the purchase price of
$1.62 per share (the closing price of our common stock at the purchase price of
$1.62 per share (the closing price of our common stock on the date of grant)
pursuant to the 2003 Incentive Plan. The option will vest over one year in
equal monthly installments. The option will accelerate upon a “Change in
Control” as defined in the 2003 Incentive Plan.  The option has a
three-year life, subject to continuous service.

 

Retention Agreements

 

We entered into amended and restated retention
agreements with Messrs. Farkaly, Gawarecki, Kalbfleisch, LoForti and
Scroop effective September 27, 2007. These agreements provide that the
officer will receive a lump sum severance payment if, within two years of the
consummation of a change in control of our company, he is terminated without
cause or resigns with good reason. These severance payments are based on the
officer’s base salary at the time of the consummation of the change in control
or the termination date, whichever is higher, plus his or her target bonus for
the year prior to the consummation of the change in control, or in the case of Mr. Farkaly,
the target sales commission he is eligible to receive, prior to a change of
control, in the event targeted revenue is achieved for the year. The agreements
provide that, upon a change in control, Mr. LoForti would be entitled to receive
an amount equal to 2.0 times his base salary plus target bonus; and Messrs. Farkaly,
Gawarecki, Kalbfleisch, and Scroop each would be entitled to an amount equal to
his respective base salary plus target bonus (or in the case of Mr. Farkaly,
target sales commission). If any portion of any payment under any of the
agreements would constitute an “excess parachute payment” within the meaning of
Section 280G of the Internal Revenue Code, then that payment will be
reduced to an amount that is one dollar less than the threshold for triggering
the tax imposed by Section 4999 of the Internal Revenue Code.

 

 

Cancellation of Certain Stock
Options

 

In November 2007, our
Shareholders approved the cancellation of stock options with an exercise price
of $10 per share or more held by our current officers and directors as
described in Proposal 2 of our definitive proxy statement filed with the SEC on
October 10, 2007, which description is incorporated herein by reference. The
stock options cancelled include the following:

 

	
   

  	
   

  	
  Option

  	
   

  	
  Number

  	
   

  	
  Per Share

  	
   

  	
   

  	
   

  
	
  Optionee
  Name

  	
   

  	
  Grant Date

  	
   

  	
  of Shares

  	
   

  	
  Exercise Price

  	
   

  	
  Plan Name

  	
   

  
	
  Robert Degan

  	
   

  	
  1/20/2003

  	
   

  	
  22,000

  	
   

  	
  $

  	
  14.75

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  3/3/2005

  	
   

  	
  12,000

  	
   

  	
  $

  	
  14.67

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Robert Farkaly

  	
   

  	
  6/25/2003

  	
   

  	
  5,000

  	
   

  	
  $

  	
  20.25

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/18/2004

  	
   

  	
  5,000

  	
   

  	
  $

  	
  13.98

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Mike Gawarecki

  	
   

  	
  4/21/2000

  	
   

  	
  20,000

  	
   

  	
  $

  	
  10.00

  	
   

  	
  1997 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  7/10/2002

  	
   

  	
  52,500

  	
   

  	
  $

  	
  13.50

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/17/2003

  	
   

  	
  10,000

  	
   

  	
  $

  	
  19.33

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
  11/15/2004

  	
   

  	
  31,400

  	
   

  	
  $

  	
  14.29

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   Kurt
  Kalbfleisch

  	
   

  	
  4/21/2000

  	
   

  	
  8,000

  	
   

  	
  $

  	
  10.00

  	
   

  	
  1995 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  7/2/2003

  	
   

  	
  10,000

  	
   

  	
  $

  	
  20.13

  	
   

  	
  1995 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/18/2004

  	
   

  	
  3,500

  	
   

  	
  $

  	
  13.98

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Vernon LoForti

  	
   

  	
  4/21/2000

  	
   

  	
  20,000

  	
   

  	
  $

  	
  10.00

  	
   

  	
  1997 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  7/10/2002

  	
   

  	
  60,000

  	
   

  	
  $

  	
  13.50

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/17/2003

  	
   

  	
  10,000

  	
   

  	
  $

  	
  19.33

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
  11/15/2004

  	
   

  	
  29,700

  	
   

  	
  $

  	
  14.29

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Scott McClendon

  	
   

  	
  1/20/2003

  	
   

  	
  11,000

  	
   

  	
  $

  	
  14.75

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/17/2003

  	
   

  	
  18,000

  	
   

  	
  $

  	
  19.33

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
  11/15/2004

  	
   

  	
  18,000

  	
   

  	
  $

  	
  14.29

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Michael Norkus

  	
   

  	
  8/11/2004

  	
   

  	
  4,500

  	
   

  	
  $

  	
  11.05

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
  11/15/2004

  	
   

  	
  18,000

  	
   

  	
  $

  	
  14.29

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
  Robert Scroop

  	
   

  	
  7/10/2002

  	
   

  	
  60,000

  	
   

  	
  $

  	
  13.50

  	
   

  	
  2000 Stock Option Plan

  	
   

  
	
   

  	
   

  	
  11/17/2003

  	
   

  	
  10,000

  	
   

  	
  $

  	
  19.33

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
  11/15/2004

  	
   

  	
  29,700

  	
   

  	
  $

  	
  14.29

  	
   

  	
  2003 Equity Incentive Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Shares Cancelled

  	
   

  	
   

  	
   

  	
  468,300Exhibit
10.1

SETTLEMENT AGREEMENT

 

This Settlement Agreement (the “Settlement Agreement”) is made as of January 31,
2008 by, between, and among Reddy Ice Holdings, Inc. (the “Company”), on
the one hand, and Frozen, LLC (“Frozen”), Hockey Parent Inc. (“Hockey Parent”
and, together with Frozen, the “Parents”), GSO Special Situations Fund LP, GSO
Special Situations Overseas Master Fund Ltd., GSO Credit Opportunities Fund
(HELIOS), L.P. (together with GSO Special Situations Fund LP and GSO Special
Situations Overseas Master Fund Ltd., the “Guarantors”) and GSO Capital
Partners LP (“GSO” and, together with the Guarantors and the Parents, the “GSO
Entities”), on the other hand.

 

WHEREAS, the Company, the Parents and Hockey MergerSub, Inc. (“Merger
Sub”) entered into an Agreement and Plan of Merger dated as of July 2,
2007 (as amended by Amendment No. 1 thereto, dated as of August 30,
2007, the “Merger Agreement”) pursuant to which, subject to the terms and
conditions stated therein, Merger Sub was to merge with and into the Company
and the Company was to continue as the surviving corporation and a wholly-owned
subsidiary of the Parents (the “Merger”);

 

WHEREAS,
the Guarantors provided a Guarantee dated as of July 2, 2007 in favor of
the Company concerning the transactions contemplated by the Merger Agreement
(the “Guarantee,” and together with the Merger Agreement, the “Agreements”);

 

WHEREAS,
GSO and the Company entered into a Mutual Nondisclosure Agreement dated May 3,
2007 (the “Existing Mutual Nondisclosure Agreement”);

 

NOW,
THEREFORE, IT IS AGREED by and between the Company and the GSO Entities
(together, the “Parties”), intending to be legally bound, fully aware of all
legal rights and remedies available to them, in consideration of the mutual
covenants and agreements set forth in this Settlement Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, AS FOLLOWS:

 

     1.                        Termination of
Merger Agreement; the Settlement Payment. The Merger Agreement is
hereby terminated as of the date hereof. 
In consideration of the agreements made by the Company under this
Settlement Agreement, the GSO Entities shall pay, or cause to be paid, to the
Company, in accordance with the Limited Guarantee, an aggregate amount of
$21 million (collectively, the “Payment”) no later than February 5,
2008 (the “Payment Date”) in the form of bank-wired funds, sent to the account
set forth on Schedule 1 hereto.

 

     2.                        The Third-Party
Advisor Payment. In consideration of the agreements made by the GSO
Entities under this Settlement Agreement, the Company shall pay, or cause to be
paid, to GSO Special Situations Fund LP, or as directed by GSO Special
Situations Fund LP, up to an aggregate amount of $4.0 million in payment
of the fees and expenses of the GSO Entities in connection with the
transactions contemplated by the Agreements, including, without limitation, of
third-party advisors retained by the GSO Entities, provided that the GSO
Entities provide the Company with invoices reflecting such fees and
expenses.  The Company shall make this
payment, or cause this payment to be paid, no later than the later of (i) two
(2) business days after receipt of these invoices and (ii) the date
on which the Payment is paid to the Company, in the form of bank-wired funds,
as directed by GSO Special Situations Fund LP. The GSO Entities 

 

 

 

 

will
promptly provide the final diligence reports generated by each of Stax, PWC,
Environ, Mercer and Marsh Inc. and provided to the GSO Entities, subject to the
execution by the Company of a customary non-reliance and release letter to the
extent required by any such advisors as a condition to the release of such
report to the Company.

 

     3.                        Press Release
and Mutual Nondisclosure Agreements.

 

                (a) Upon execution of this
Settlement Agreement, the Company shall issue a press release in the form
attached hereto as Exhibit A, and any comments that the GSO Entities or
the Company shall make in the future concerning the termination of the Merger
Agreement or the subject matter of this Settlement Agreement shall be
consistent therewith.

 

                (b) Each of GSO and the
Company hereby agrees and covenants that (i) the Existing Mutual
Nondisclosure Agreement is hereby terminated as of the date hereof and (ii) it
has executed and entered into the Mutual Nondisclosure Agreement dated as of
the date hereof (the “Replacement Mutual Nondisclosure Agreement”).

 

     4.                        Release by the Company.

 

                (a) For good and sufficient
consideration, the Company accepts the Payment as full performance by the GSO
Entities of their obligations under Section 8.3(d) of the Merger
Agreement and accordingly the Company does hereby on its behalf and on behalf
of its former, current or future officers, directors, agents, advisors,
representatives, managers, members, partners, shareholders, employees,
subsidiaries, financing sources, affiliates (including, without limitation,
controlling persons), employees of affiliates, principals, and any heirs,
executors, administrators, successors or assigns of any said person or entity,
and any other person claiming (now or in the future) for the Company through or
on behalf of the Company, unequivocally release and discharge, and hold
harmless, the GSO Entities, and any of their respective former, current or future
officers, directors, agents, advisors, representatives, managers, members,
partners, shareholders, employees, subsidiaries, financing sources (including,
without limitation, Morgan Stanley Senior Funding, Inc. and its
affiliates), affiliates (including, without limitation, controlling persons),
employees of affiliates, principals, and any heirs, executors, administrators,
successors or assigns of any said person or entity (the “Released GSO Parties”),
from any and all past, present, direct, indirect and derivative liabilities,
claims, rights, actions, counts, causes of action, obligations, sums of money
due, attorneys’ fees, suits, debts, covenants, agreements, promises, demands,
and damages of every kind and nature, in law or in equity, asserted or that could
have been asserted, under federal or state statute, or common law, known and
unknown, suspected or unsuspected, foreseen or unforeseen, anticipated or
unanticipated, whether or not concealed or hidden, from the beginning of time
until date of execution of this Settlement Agreement (collectively, “Claims”),
that in any way arise from or out of, are based upon, or are in connection with
or relate to any breach, non-performance, action or failure to act under the
Agreements (the “Released GSO Claims”); provided, however, that the GSO
Entities shall not be released from any claim for breach, non-performance,
action or failure to act under (i) this Settlement Agreement, and (ii) the
Replacement Mutual Nondisclosure Agreement; it being understood that the GSO
Entities and the Company may compete with each other in the future, and the
Replacement Mutual Nondisclosure Agreement does not in and of itself preclude
such competition.

 

                (b) It is understood and
agreed that, except as provided in the last clause of the preceding paragraph,
the preceding paragraph is a full and final release covering all known as well
as 

 

 

 

 

unknown
or unanticipated debts, claims or damages of the Company relating to or arising
out of any breach, non-performance, action or failure to act under the
Agreements. Therefore, the Company expressly waives any rights it may have
under statute or common law principle under which a general release does not
extend to claims which the Company does not know or suspect to exist in its
favor at the time of executing the release, which if known by the Company must
have affected the Company’s settlement with the GSO Entities. In connection
with such waiver and relinquishment, the Company acknowledges that it or its
attorneys or agents may hereafter discover claims or facts in addition to or
different from those which they now know or believe to exist with respect to
the Released GSO Claims, but that it is the Company’s intention hereby fully,
finally and forever to settle and release all of the Released GSO Claims. In
furtherance of this intention, the releases herein given shall be and remain in
effect as full and complete releases with regard to the Released GSO Claims
notwithstanding the discovery or existence of any such additional or different
claim or fact.

 

                (c) California Civil
Code Section 1542. The Company acknowledges that it has been advised
by legal counsel and is familiar with the provisions of California Civil Code Section 1542,
which provides as follows:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

The
Company, being aware of said code section, agrees to expressly waive any rights
it may have thereunder, as well as under any other statute or common law
principles of similar effect, with respect to any other Party under the
Agreements; provided, however, that no Party releases any other Party from any
obligations, liabilities or claims arising under any representation or
warranty, or in connection with the performance of any covenant or obligation,
under this Settlement Agreement.

 

     5.                        Release by the
GSO Entities.

 

                (a) For good and sufficient
consideration, the GSO Entities do hereby on their behalf and on behalf of
their former, current or future officers, directors, agents, advisors,
representatives, managers, members, partners, shareholders, employees,
subsidiaries, financing sources, affiliates (including, without limitation,
controlling persons), employees of affiliates, principals, and any heirs,
executors, administrators, successors or assigns of any said person or entity,
and any other person claiming (now or in the future) for the GSO Entities through
or on behalf of the GSO Entities, unequivocally release and discharge, and hold
harmless, the Company and any of its respective former, current or future
officers, directors, agents, advisors, representatives, managers, members,
partners, shareholders, employees, subsidiaries, financing sources, affiliates
(including, without limitation, controlling persons), employees of affiliates,
principals, and any heirs, executors, administrators, successors or assigns of
any said person or entity, other than in each case Morgan Stanley Senior
Funding, Inc. and its affiliates, each of whom are not Released Company
Parties (the “Released Company Parties”), from any and all past, present,
direct, indirect and derivative liabilities, claims, rights, actions, counts,
causes of action, obligations, sums of money due, attorneys’ fees, suits,
debts, covenants, agreements, promises, demands, and damages of every kind and
nature, in law or in equity, asserted or that could have been asserted, under
federal or state statute, or common law, known and unknown, suspected or
unsuspected, 

 

 

 

 

foreseen
or unforeseen, anticipated or unanticipated, whether or not concealed or
hidden, from the beginning of time until date of execution of this Settlement
Agreement, that in any way arise from or out of, are based upon, or are in
connection with or relate to any breach, non-performance, action or failure to
act under the Agreements (the “Released Company Claims”); provided, however,
that the Company shall not be released from any claim for breach,
non-performance, action or failure to act under (i) this Settlement
Agreement,  and (ii) the Replacement
Mutual Nondisclosure Agreement; it being understood that the GSO Entities and
the Company may compete with each other in the future, and the Replacement
Mutual Nondisclosure Agreement does not in and of itself preclude such
competition.

 

                (b) It is understood and
agreed that, except as provided in the last clause of the preceding paragraph,
the preceding paragraph is a full and final release covering all known as well
as unknown or unanticipated debts, claims or damages of the GSO Entities
relating to or arising out of any breach, non-performance, action or failure to
act under the Agreements. Therefore, the GSO Entities expressly waive any rights
they may have under statute or common law principle under which a general
release does not extend to claims which the GSO Entities do not know or suspect
to exist in their favor at the time of executing the release, which if known by
the GSO Entities must have affected the GSO Entities’ settlement with the
Company. In connection with such waiver and relinquishment, the GSO Entities
acknowledge that they or their attorneys or agents may hereafter discover
claims or facts in addition to or different from those which they now know or
believe to exist with respect to the Released Company Claims, but that it is
the GSO Entities’ intention hereby fully, finally and forever to settle and
release all of the Released Company Claims. In furtherance of this intention,
the releases herein given shall be and remain in effect as full and complete
releases with regard to the Released Company Claims notwithstanding the
discovery or existence of any such additional or different claim or fact.  For purposes of clarity, the GSO Entities are
not releasing Morgan Stanley Senior Funding, Inc. or any of its affiliates
for any Claims it may have against any of them and such Claims do not
constitute “Released Company Claims”.

 

                (c) California Civil
Code Section 1542. The GSO Entities acknowledge that they have been
advised by legal counsel and are familiar with the provisions of California
Civil Code Section 1542, which provides as follows:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

The
GSO Entities, being aware of said code section, agree to expressly waive any
rights they may have thereunder, as well as under any other statute or common
law principles of similar effect, with respect to any other Party under the
Agreements; provided, however, that no Party releases any other Party from any
obligations, liabilities or claims arising under any representation or
warranty, or in connection with the performance of any covenant or obligation,
under this Settlement Agreement.

 

     6.                        No Wrongdoing. It is
expressly understood and agreed that this Settlement Agreement, and any
negotiations or proceedings in connection herewith, do not constitute and may
not be construed as, or deemed to be, either evidence or an admission or
concession on the part of any Party of any liability or wrongdoing whatsoever.
The act of entering into or carrying out the 

 

 

 

 

Settlement
Agreement and any negotiations or proceedings related thereto shall not be
used, offered or received into evidence in any action or proceeding in any
court, administrative agency or other tribunal for any purpose whatsoever other
than to enforce the provisions of the Settlement Agreement, provided that the
Settlement Agreement may be filed or submitted by the Parties to support a
claim of 
res judicata, collateral estoppel, other theory of claim or
issue preclusion, release, discharge or satisfaction.

 

     7.                        Covenant Not to
Sue.

 

                (a) Except as provided in
the last clause of Paragraph 4(a), the Company hereby covenants to the
Released GSO Parties not to, with respect to any Released GSO Claim, directly
or indirectly encourage or solicit or voluntarily assist or participate in any
way in the filing, reporting or prosecution by a Party, Parties or any third
party of a suit, arbitration, mediation, or claim (including a third party or
derivative claim) against any Released GSO Party relating to any Released GSO
Claim. The covenants contained in this Paragraph 7(a) shall survive this
Settlement Agreement indefinitely regardless of any statute of limitations.

 

                (b) Except as provided in
the last clause of Paragraph 5(a), the GSO Entities hereby covenant to the
Released Company Parties not to, with respect to any Released Company Claim,
directly or indirectly encourage or solicit or voluntarily assist or
participate in any way in the filing, reporting or prosecution by a Party,
Parties or any third party of a suit, arbitration, mediation, or claim
(including a third party or derivative claim) against any Released Company
Party relating to any Released Company Claim. The covenants contained in this
Paragraph 7(b) shall survive this Settlement Agreement indefinitely
regardless of any statute of limitations.

 

     8.                        Waiver. Any term of
this Settlement Agreement may be waived at any time by the Party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. No waiver by any Party of any term or condition
of this Settlement Agreement, in any one or more instances, shall be deemed to
be a waiver of any other term or condition nor construed as a waiver of the
same or any other term or condition of this Settlement Agreement on any future
occasion. All remedies, either under this Settlement Agreement or by any laws
or otherwise afforded, will be cumulative and not alternative.

 

     9.                        No Assignment. Neither this
Settlement Agreement nor any right, interest or obligation hereunder may be
assigned by any Party hereto without the prior written consent of the other
Parties hereto and any attempt to do so will be void, except for assignments
and transfers by operation of any laws. Subject to the preceding sentence and
Paragraph 11 below, the rights, duties and obligations set forth in this
Settlement Agreement shall be binding upon and inure to the benefit of any and
all former, current or future officers, directors, agents, advisors,
representatives, managers, members, partners, shareholders, employees,
subsidiaries, financing sources, affiliates (including, without limitation,
controlling persons), employees of affiliates, principals, and any heirs,
executors, administrators, successors or assigns of any said person or entity,
and any other person claiming (now or in the future) through or on behalf of
them.

 

     10.                  Entire
Agreement. The Parties each separately intend the settlement set
forth in the Settlement Agreement to be a final and complete resolution of all
disputes between them. This Settlement Agreement contains the entire agreement
between the Parties as respects its subject matter. All discussions and
agreement previously entertained or entered into between the Parties concerning
the subject matter of the Settlement Agreement are superseded in their entirety
by the 

 

 

 

 

Settlement
Agreement and are of no further force or effect. The Settlement Agreement may
not be modified or amended, nor any of its terms or provisions waived, except
by an instrument in writing signed by all Parties hereto.

 

     11.                  Third Party
Beneficiaries. The Parties acknowledge and agree that the Company’s
and the GSO Entities’ former, current or future officers, directors, agents,
advisors, representatives, managers, members, partners, shareholders,
employees, subsidiaries, financing sources (including, without limitation, for
purposes of Paragraph 4, Morgan Stanley Senior Funding, Inc. and its
affiliates), affiliates (including, without limitation, controlling persons),
employees of affiliates, principals, and any heirs, executors, administrators,
successors or assigns of any said person or entity are express third party
beneficiaries of the releases contained in Paragraphs 4 and 5 of the Settlement
Agreement (as applicable) and the covenants not to sue contained in
Paragraph 7 of this Settlement Agreement and are entitled to enforce
rights under such sections to the same extent that such persons and entities
could enforce such rights if they were a party to this Settlement Agreement.
Except as set forth in this paragraph, the Parties agree that this Settlement
Agreement is not intended to, and does not, confer rights upon any other third
party.

 

     12.                  Notice. All notices
and other communications to any Party shall be in writing (including facsimile
transmission) and shall be given, if to the GSO Entities, to:

 

	
   

  	
  280
  Park Avenue, 11th Floor

  
	
   

  	
  New
  York, NY 10017

  
	
   

  	
  Tel:

  	
  (212)
  503-2171

  
	
   

  	
  Fax:

  	
  (212)
  503-6960

  
	
   

  	
  Attn:

  	
  Timothy
  J. White

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Kirkland &
  Ellis LLP

  
	
   

  	
  200
  East Randolph Drive

  
	
   

  	
  Chicago,
  Illinois 60601

  
	
   

  	
  Attention:

  	
  Jeffrey
  Seifman, P.C.

  
	
   

  	
  Tel:

  	
  (312)
  861-2000

  
	
   

  	
  Fax:

  	
  (312)
  861-2200

  
	
   

  	
   

  	
   

  
	
  if
  to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
  Reddy
  Ice Holdings, Inc.

  
	
   

  	
  8750
  North Central Expressway, Suite 1800

  
	
   

  	
  Dallas,
  Texas 75231

  
	
   

  	
  Attention:

  	
  William
  P. Brick

  
	
   

  	
  Tel:

  	
  (214)
  526-6740

  
	
   

  	
  Fax:

  	
  (214)
  528-1532

  
	
   

  	
   

  	
   

  
	
  with
  a copy (which shall not constitute notice) to:

  
	
   

  	
   

  	
   

  
	
   

  	
  DLA
  Piper US LLP

  
	
   

  	
  1251
  Avenue of the Americas

  
	
   

  	
  New
  York, NY 10020

  
	
   

  	
  Attention:

  	
  Roger
  Meltzer, Esq.

  
	
   

  	
  Tel:

  	
  (212)
  335-4500

  
	
   

  	
  Fax:

  	
  (212)
  335-4501

  
				

 

 

 

 

     13.                  Captions. The captions
and headings used herein are included for convenience of reference only and
shall be ignored in the construction and interpretation hereof.

 

     14.                  Severability. In the event
that any provision of this Settlement Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Settlement Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The Parties agree to replace such void or unenforceable
provision of this Settlement Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of such void or unenforceable provision.

 

     15.                    Injunctive
Relief. The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Settlement Agreement are not performed in
accordance with their specified terms or are otherwise breached in any material
respect. It is accordingly agreed that a Party shall be entitled to seek a
temporary restraining order or preliminary injunction from any court of
competent jurisdiction to maintain the status quo or otherwise to prevent a
material breach of this Settlement Agreement and to seek to enforce
specifically the terms and provisions hereof until an action to enforce this
Settlement Agreement can be commenced or an injunction hearing held.

 

     16.                  Governing Law. This
Settlement Agreement shall be governed by and construed and interpreted in accordance
with the law of the State of New York, without regard to the conflicts of law
provisions.

 

     17.                  Jurisdiction. The Parties
submit to the jurisdiction of the United States District Court for the Southern
District of New York or any New York State court sitting in the County of New
York for the purposes of enforcement and interpretation of this Settlement
Agreement. The Parties agree that process may be served upon them in any manner
authorized by the laws of the State of New York for such persons and waives and
covenants not to assert or plead any objection which they might otherwise have
to such jurisdiction, venue and process. Each Party hereto hereby agrees not to
commence any legal proceedings relating to or arising out of this Agreement or
the transactions contemplated hereby in any jurisdiction or courts other than
as provided herein.

 

     18.                    WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

     19.                  Representations
of the Parties. Each Party represents and warrants to the other
Parties as follows:

 

                (a) Such Party is duly
organized and validly existing under the laws of the jurisdiction of its
organization and is in good standing in such jurisdiction.

 

                (b) Such Party has all
requisite legal and corporate power and authority to execute, deliver and
perform the obligations under this Settlement Agreement and has taken all
necessary action to authorize such execution, delivery and performance of this
Settlement Agreement.

 

                (c) This Agreement
constitutes a valid and binding obligation of such Party, enforceable 

 

 

 

 

against
such Party in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of
law governing specific performance, injunctive relief or other equitable
remedies.

 

                (d) The execution and
delivery of this Settlement Agreement by such Party does not, and the
performance by such Party of the transactions contemplated by this Settlement
Agreement do not: (i) conflict with, or result in a violation or breach
of, any provision of its charter or bylaws (or equivalent organizational
documents), (ii) conflict with, or result in any violation or breach of,
or constitute (with our without notice of lapse of time, or both) a default
under or require a consent or waiver under, any of the terms, conditions or
provisions of any contractual restriction binding on such Party or affecting
such Party or any of its assets; or (iii) conflict with or violate any
order or judgment of any court or other agency of government applicable to such
Party or any of its assets.

 

                (e) All governmental and
other consents that are required to have been obtained by it with respect to
this Settlement Agreement have been obtained and are in full force and effect
and all conditions of any such consents have been complied with.

 

                (f) Such Party is not
aware, as of the date hereof, of any violation by any other Party of the
Replacement Mutual Nondisclosure Agreement.

 

     20.                  Representation
of Signatories. The persons signing this Settlement Agreement
represent and warrant that they are duly authorized to do so on behalf of the
Party for whom they are signing.

 

     21.                  Counterparts. This
Settlement Agreement may be executed in counterparts by any of the signatories
hereto, and as so executed shall constitute one agreement.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the parties
have caused this Agreement to be executed as of the date first above written.

 

	
   

  	
   

  
	
   

  	
  REDDY
  ICE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/
  William P. Brick

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William
  P. Brick

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
								

 

 

 

 

	
   

  	
  FROZEN,
  LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOCKEY
  PARENT INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSO
  SPECIAL SITUATIONS FUND LP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSO
  Capital Partners LP

  
	
   

  	
   

  	
  its
  investment advisor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Legal Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSO
  SPECIAL SITUATIONS OVERSEAS MASTER FUND LTD.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSO
  Capital Partners LP

  
	
   

  	
   

  	
  its
  investment advisor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Legal Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSO
  CREDIT OPPORTUNITIES FUND (HELIOS), L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSO
  Capital Partners LP

  
	
   

  	
   

  	
  its
  investment advisor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Legal Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSO
  CAPITAL PARTNERS LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  George Fan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  George
  Fan

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Legal Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]