Document:

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                                                                    EXHIBIT 10.5

                               SEVERANCE AGREEMENT

         AGREEMENT between Packaged Ice, Inc., a Texas corporation ("Company")
and James F. Stuart ("Stuart") dated as of April 19, 2001.

         WHEREAS, Stuart and the Company are parties to an Employment Agreement
dated August 1, 1998 (the "Employment Agreement"), pursuant to which Stuart
would be paid severance compensation in the event of an involuntary termination;
and

         WHEREAS, subject to the terms and conditions of this Agreement, Stuart
and the Company have agreed that Stuart's employment with the Company would
terminate and the Company would pay severance compensation to Stuart; and

         WHEREAS, as a material part of this Agreement, Stuart has agreed to
voluntarily resign his employment with the Company and its subsidiaries, and his
positions as Chairman, Chief Executive Officer and Director of the Company and
its subsidiaries, effective April 19, 2001; for the purposes of this Agreement,
the defined term "Company" shall include Packaged Ice, Inc. and all of its
subsidiaries and

         WHEREAS, the parties wish to eliminate any questions concerning their
mutual obligations with respect to, and arising out of Stuart's resignation from
his positions with the Company;

                  NOW, THEREFORE, in consideration of the mutual covenants
expressed herein, the parties agree as follows:

         1.       Stuart hereby resigns, and the Company hereby accepts,
                  Stuart's resignation from his position as Chairman and Chief
                  Executive Officer and as a member of the Board of Directors of
                  the Company effective as of the date hereof (the "Termination
                  Date"). Such resignation shall be deemed to also constitute
                  Stuart's resignation as an officer and a director of any
                  related companies. Stuart shall also be deemed to have
                  resigned from all other positions, titles and duties held by
                  him by reason of his association with the Company.

         2.       For a period commencing April 20, 2001 and ending February 29,
                  2004, the Company will pay Stuart the sum of $250,000 per
                  annum, less any applicable withholding taxes. This sum will be
                  paid in equal installments in accordance with the Company's
                  now existing regular payroll schedule for its executives. In
                  the event of Mr. Stuart's death or disability prior to
                  February 29, 2004, this compensation will continue without
                  interruption. Payment would be made to Mr. Stuart's personal
                  representative in the event of his death.

         3.       For a period of eighteen (18) months following the effective
                  date of Stuart's resignation, the Company will continue to pay
                  the full-premium cost of continuing the enrollment of Stuart
                  and his current dependents in the Company's group health plan
                  provided that Stuart will still be required to pay his portion
                  of the dependent care coverage as required of employees under
                  the current group health plan. If required by applicable law,
                  this coverage shall be pursuant to the Consolidated Omnibus
                  Budget Reconciliation Act ("COBRA"), in the manner and on the
                  schedule specified in the COBRA instructions the Company will
                  be furnishing to him. If upon expiration of this 18-month
                  period Stuart or any of his dependents are no longer eligible
                  to be covered under the Company's group health plan, the
                  Company will reimburse Stuart for the reasonable cost of
                  continuing the enrollment of Stuart and any affected
                  dependents in a comparable replacement medical benefits plan
                  through February 29, 2004 provided that Stuart will still be
                  required to pay his portion of the dependent care coverage as
                  required of employees under the current group health plan. If
                  Stuart or any of his dependents is eligible to be covered
                  under the Company's group health plan after the 18 month COBRA
                  period, the Company shall continue to pay the full premium
                  cost of continuing the enrollment of Stuart and his dependents
                  in the Company's group health plan provided that Stuart will
                  still be required to pay his portion of the dependent care
                  coverage as required of employees under the current group
                  health plan.

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         4.       Within 30 days following the date hereof, the Company will pay
                  Stuart for any vacation he earned but has not used as of the
                  effective date of his resignation, to the extent the same has
                  not already been paid. In addition, within 30 days following
                  the date hereof, the Company will reimburse Stuart for all
                  ordinary and necessary expenses incurred by him during his
                  employment, including, without limitation, $18,000
                  representing unreimbursed automobile expenses incurred since
                  November 1999.

         5.       Except as provided in Sections 2, 3 and 4 of this Agreement,
                  the Company shall have no obligation to make any other
                  payments or provide any other benefits to Stuart on or after
                  the Termination Date. The parties agree that this Section 5
                  shall supersede any provisions to the contrary set forth in
                  the Employment Agreement.

         6.       Notwithstanding Stuart's resignation, the Company will honor
                  and shall otherwise cause to be honored its grants of
                  non-qualified options to Stuart, which shall remain in full
                  force and effect, but

                           (a)      Stuart's right to such option shares shall
                                    be deemed fully (100%) vested on the
                                    effective date of his resignation and shall
                                    thereafter remain exercisable;

                           (b)      Stuart (or his heirs and assigns) shall be
                                    permitted to exercise the options through
                                    April 19, 2004 at which time all unexercised
                                    options will expire;

                           (c)      except as stated herein, the grants of
                                    options shall remain subject to all terms
                                    and conditions set forth in the applicable
                                    stock option plans and stock option
                                    agreements. Such plan and agreements shall
                                    be considered amended for all purposes to
                                    the extent inconsistent with the terms
                                    hereof.

         7.       Within 30 days following the date hereof, the Company will
                  transfer to Stuart all key man life insurance policies on his
                  life, and Stuart will be responsible for all premium payments
                  or liability therefor.

         8.       Stuart agrees to provide consulting services to the Company
                  for the period ending March 2, 2004 at the request of the
                  Company's Chief Executive Officer or at the request of the
                  Board of Directors, provided, however, Stuart will not, and
                  will not be obligated to, undertake any services without the
                  express written request of the Chief Executive Officer of
                  Board of Directors received in advance. Stuart agrees not to
                  contact any Company investment banker, analyst, portfolio
                  manager, investor, customer, vendor or employee on behalf of
                  the Company or in any manner which interferes with the
                  Company's established relationship with any of the foregoing,
                  without the written approval of the Company's Chief Executive
                  Officer or the Board of Directors.

         9.       Stuart confirms that he has delivered and returned to the
                  Company any and all property of the Company (including but not
                  limited to files, records, computer disks and related
                  materials, office access keys and office equipment) in good
                  condition, ordinary wear and tear excepted; provided, however,
                  that Stuart shall be entitled to retain the cellular telephone
                  currently in his possession, and the Company hereby assigns,
                  sells and conveys to Stuart all the Company's rights, title
                  and interest in and to said telephone. Stuart shall be
                  responsible for payment of all charges associated with said
                  cellular telephone after the Termination Date.

         10.      The Company and Stuart agree that the terms and conditions of
                  the Indemnification Agreement dated October 18, 1994 between
                  Company and Stuart shall remain in full force and effect and
                  shall survive the termination of Stuart's employment and
                  directorship relationship with the Company in accordance with
                  their terms. The Indemnification Agreement shall be amended to
                  the extent necessary to cause such survival through the
                  expiration of any applicable statute of limitations.

         11.      Stuart will refrain from disparaging the Company or its
                  services, products, directors, agents, or employees in any
                  manner, and from any other action that may lead to the
                  impairment of the Company's reputation and good standing in
                  the community and industry, or that may interfere with its
                  relationships with others with whom it does business, or with
                  its customers or employees,

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                  except as may be necessary to comply with a valid order,
                  subpoena or law and after reasonable notice has been given to
                  the Company that Stuart is or may become under a legal duty to
                  make disparaging remarks, opinions or disclosures. The
                  Company's officers and directors will refrain from
                  disparaging, in any manner, Stuart's personal or business
                  reputation or standing in the community and industry, and,
                  subject to Section 15 below, from interfering with Stuart's
                  pursuit of other gainful employment, except as may be
                  necessary to comply with a valid order, subpoena or law and
                  after reasonable notice has been given to Stuart that the
                  Company is or may become under a legal duty to make
                  disparaging remarks, opinions or disclosures.

         12.      Stuart will cooperate fully with the Company and its attorneys
                  concerning any current or future litigation or other legal
                  matter affecting the Company, to the extent that Stuart has or
                  may have knowledge of facts pertaining thereto. The Company
                  will strive to minimize the amount of time required of Stuart,
                  if any, for this purpose. Stuart will be reimbursed for
                  reasonable out-of-pocket expenses incurred in connection
                  therewith.

         13.      Stuart does, for himself and his heirs, agents, executors,
                  administrators, and assigns hereby RELEASE and FOREVER
                  DISCHARGE the Company and its directors, officers, employees,
                  agents, successors, assigns, and affiliated entities from any
                  and all claims, actions, and causes of action of whatever kind
                  or nature, which he may now have or ever may have had against
                  the said releasees, whether known or unknown to him, such as
                  may have arisen in whole or in part at any time prior to the
                  execution of this Severance Agreement. The claims being waived
                  by virtue of this Severance Agreement include, but are not
                  limited to those arising under

                  o        The Age Discrimination in Employment Act, 29 U.S.C.
                           Section 621, et seq.;

                  o        The Americans with Disabilities Act, 42 U.S.C.
                           Section 12101, et seq.;

                  o        The Family & Medical Leave Act, 29 U.S.C. Section
                           2601, et seq.;

                  o        Title VII of the Civil Rights Act of 1964, as
                           amended, 42 U.S.C. Section 2000e, et seq.;

                  o        The Texas Commission on Human Rights Act, Labor Code
                           Section 21.001, et seq.;

                  o        Chapter 451, Texas Labor Code; and

                  o        The common or statutory laws of the United States or
                           the State of Texas, whether in tort or in contract,
                           and SPECIFICALLY INCLUDING ANY CLAIM STUART MIGHT
                           MAKE FOR NEGLIGENCE.

                  Stuart also promises that he will not file any sort of lawsuit
                  or claim against the releasees in any court of law or with any
                  federal, state or local governmental agency. The claims
                  released hereby do not include any obligations of the Company
                  under this Agreement.

         14.      The Company does, for itself and its directors, officers,
                  employees, agents, successors, assigns, and affiliated
                  entities hereby RELEASE and FOREVER DISCHARGE Stuart and his
                  heirs, agents, executors, administrators, and assigns from any
                  and all claims, actions, and causes of action of whatever kind
                  or nature, which it may now have or ever may have had against
                  the said releasees, whether known or unknown to the Company,
                  such as may have arisen in whole or in part at any time prior
                  to the execution of this Severance Agreement. The claims being
                  waived by virtue of this Severance Agreement include, but are
                  not limited to ANY CLAIMS THE COMPANY MIGHT MAKE FOR
                  NEGLIGENCE. The Company also promises that it will not file
                  any sort of lawsuit or claim against the releasees in any
                  court of law or with any federal, state or local governmental
                  agency. The claims released hereby do not include any
                  obligations of Stuart under this Agreement.

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         15.      Notwithstanding Sections 13 and 14 hereof, the following
                  sections of the Employment Agreement shall remain in full
                  force and effect:

                  o        Section 6, Disclosure of Confidential Information,
                           Covenant Not to Compete;

                  o        Subsection 7.2, Injunctive Relief;

                  o        Subsection 7.7, Governing Law; and

                  o        Subsection 7.8, Arbitration, it being understood that
                           the parties intend to invoke the Federal Arbitration
                           Act, 9 U.S.C. Section 1, et seq., or if such law is
                           inapplicable for any reason, then the Texas General
                           Arbitration Act, CIV. PRAC. & REM. CODE Section
                           171.001, et seq.

                  It is further agreed that Subsections 7.7 and 7.8 of the
                  Employment Agreement shall apply with equal force to this
                  Severance Agreement and are incorporated herein by reference,
                  as if fully set forth.

         16.      In the event Stuart materially breaches this Severance
                  Agreement or the continuing provisions of the Employment
                  Agreement as described in Section 15 above, which breach has
                  an adverse effect on the Company, Stuart agrees that he shall
                  no longer be entitled to any of the payments described in
                  Sections 2 and 3 hereof, and that all unexercised stock
                  options in the Company held by him shall terminate, it being
                  understood that such payments are in consideration of Stuart's
                  covenants and agreements hereunder. Notwithstanding the
                  foregoing, the Company shall have all other rights and
                  remedies to which it is entitled under law in the event Stuart
                  breaches this Severance Agreement or the continuing provisions
                  of the Employment Agreement as described in Section 15 above.

         17.      No waiver of any of the provisions of this Agreement shall be
                  deemed, or shall constitute, any waiver of any other
                  provision, whether or not similar. No waiver shall constitute
                  a continuing waiver. No waiver shall be binding unless
                  executed in writing by the party charged with the waiver. In
                  the event any provision of this Agreement shall finally be
                  determined to be unlawful, such provision shall be deemed to
                  be severed from this Agreement and every other provision of
                  this Agreement shall remain in full force and effect. If,
                  moreover, any one or more of the provisions contained in this
                  Agreement shall for any reason be held to be excessively
                  broad, it shall be construed, by limiting and reducing it, so
                  as to be enforceable to the extent compatible with the
                  applicable law as it shall then appear.

         18.      This Severance Agreement contains the complete and exclusive
                  expression of all promises and representations made between
                  the parties. Except as stated above, this Severance Agreement
                  supersedes and replaces all prior agreements and
                  understandings between the parties, both written and oral. No
                  additional or contrary promise or representation, or any
                  amendments to this Severance Agreement, shall be binding upon
                  either party unless reduced to writing and signed by Stuart
                  and a duly authorized officer of the Company on a date
                  subsequent to the date of execution of the present Agreement.

         19.      Stuart acknowledges that, with reference to the execution of
                  this Severance Agreement,

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                  o        The consideration to be received by Stuart pursuant
                           to this Agreement exceeds that which is owed to him
                           by law;

                  o        Stuart has been advised in writing to consult with an
                           attorney prior to executing this Severance Agreement;

                  o        Stuart has waived any right to consider this
                           Severance Agreement for 21 days; and

                  o        Stuart understands that, for a period of seven (7)
                           days following his execution of this Severance
                           Agreement, he may revoke it, and that the agreement
                           created by this document shall not become effective
                           or enforceable until after seven (7) days.

         20.      This Severance Agreement shall be governed by and construed in
                  accordance with the laws of the State of Texas.

         21.      Nothing contained in this Agreement shall be construed in any
                  way as an admission by the Company or Stuart that either of
                  them has acted wrongfully with respect to the other or with
                  respect to any other person, and each party specifically
                  disclaims any liability to, or wrongful acts against, the
                  other, on the part of themselves or their representatives,
                  affiliates, associates, employees or agents.

         22.      Neither party may assign this Agreement to anyone without the
                  express prior written consent of the other party hereto, which
                  consent shall not be unreasonably withheld, except that the
                  Company may assign this Agreement to a successor by merger or
                  sale of substantially all of the Company's business. Upon any
                  such assignment by the Company, the Company shall remain
                  liable for its obligations hereunder and the successor or
                  assignee shall expressly assume such obligations. This
                  Agreement shall inure to the benefit of Stuart's heirs or
                  legatees upon his death and to the benefit of any permitted
                  assigns.

         23.      This Agreement shall survive the death or disability of Stuart
                  and all the rights and entitlements of Stuart under this
                  Agreement and any relevant option plans and agreements shall
                  inure to the benefit of Stuart's personal representatives,
                  heirs, administrators and executors and shall be binding on
                  the Company and its successors and assigns.

         IN WITNESS WHEREOF, the parties have affixed their signatures in the
spaces provided on this 19th day of April, 2001.

PACKAGED ICE, INC.                           JAMES F. STUART, AN INDIVIDUAL:

By:      /s/ A.J. Lewis III                        /s/ James F. Stuart
   -----------------------------------       -----------------------------------
Name:        A.J. Lewis III
      --------------------------------
Title:         Chairman of the Board
         -----------------------------

Attest:

By:      /s/ Jimmy C. Weaver
   -----------------------------------
Name:        Jimmy C. Weaver
      --------------------------------
Title:         President & COO
      --------------------------------

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                                                                    EXHIBIT 10.6

                               SEVERANCE AGREEMENT

         AGREEMENT between Packaged Ice, Inc., a Texas corporation ("Company")
and Leonard A. Bedell ("Bedell") dated as of June 1, 2001.

         WHEREAS, subject to the terms and conditions of this Agreement, Bedell
and the Company have agreed that Bedell's employment with the Company would
terminate and the Company would pay severance compensation to Bedell; and

         WHEREAS, as a material part of this Agreement, Bedell has agreed to
voluntarily resign his employment with the Company and its subsidiaries, and his
positions as Senior Vice President - Special Projects of the Company and its
subsidiaries, effective July 1, 2001; for the purposes of this Agreement, the
defined term "Company" shall include Packaged Ice, Inc. and all of its
subsidiaries; and

         WHEREAS, the parties wish to eliminate any questions concerning their
mutual obligations with respect to, and arising out of Bedell's resignation from
his positions with the Company.

                  NOW, THEREFORE, in consideration of the mutual covenants
expressed herein, the parties agree as follows:

         1.       Bedell hereby resigns, and the Company hereby accepts,
                  Bedell's resignation from his position as Senior Vice
                  President - Special Projects of the Company effective July 1,
                  2001 (the "Termination Date"). Such resignation shall be
                  deemed to also constitute Bedell's resignation as an officer
                  of any related companies. Bedell shall also be deemed to have
                  resigned from all other positions, titles and duties held by
                  him by reason of his association with the Company.

         2.       For a period commencing July 1, 2001 and ending June 30, 2002,
                  the Company will pay Bedell the sum of $14,583.34 per month,
                  less any applicable withholding taxes. This sum will be paid
                  in accordance with the Company's now existing regular payroll
                  schedule for its executives. In the event of Bedell's death or
                  disability prior to June 30, 2002, this compensation will
                  continue without interruption. Payment would be made to
                  Bedell's personal representative in the event of his death or
                  disability.

         3.       Until the earlier of (i) June 30, 2002 or (ii) the date on
                  which Bedell is employed elsewhere with medical benefits, the
                  Company will continue to pay the full-premium cost of
                  continuing the enrollment of Bedell and his current dependents
                  in the Company's group health plan provided that Bedell will
                  still be required to pay his portion of the dependent care
                  coverage as required of employees under the current group
                  health plan. Thereafter, for a period of six additional
                  months, Bedell shall have the right to purchase health
                  coverage under the Consolidated Omnibus Budget Reconciliation
                  Act ("COBRA"), in the manner and on the schedule specified in
                  the COBRA instructions the Company will be furnishing to him.

         4.       Within 30 days following the date hereof, the Company will pay
                  Bedell for any vacation he has earned but has not used as of
                  the effective date of his resignation, to the extent the same
                  has not already been paid.

         5.       On or before September 30, 2001, the Company will pay Bedell
                  an amount equal to the unvested portion of matching 401(k)
                  contributions made by the Company on Bedell's behalf as of
                  June 30, 2001, plus 36% of such amount.

         6.       The Company agrees to grant to Bedell a stock option to
                  acquire 4,800 shares of common stock at a price per share
                  equal to the closing price on March 30, 2001 pursuant to the
                  1998 Stock Option Plan.

         7.       Except as provided in Sections 2, 3, 4, 5 and 6 of this
                  Agreement, the Company shall have no obligation to make any
                  other payments or provide any other benefits to Bedell on or
                  after the

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                  Termination Date. The parties agree that this Section 7 shall
                  supersede any provisions to the contrary set forth in any
                  employment agreement.

         8.       Notwithstanding Bedell's resignation, the Company will honor
                  and shall otherwise cause to be honored its grants of
                  non-qualified options to Bedell (including the grant referred
                  to in Section 6 hereof), which shall remain in full force and
                  effect, but

                           (a)      Bedell's right to such option shares shall
                                    be deemed fully (100%) vested on June 30,
                                    2002, assuming Bedell has complied fully
                                    with the terms of this Agreement and no
                                    other event has caused said options to vest
                                    sooner in accordance with the terms and
                                    conditions of the respective option
                                    agreement;

                           (b)      Bedell (or his heirs and assigns) shall be
                                    permitted to exercise the options through
                                    June 30, 2003 at which time all unexercised
                                    options will expire;

                           (c)      except as stated herein, the grants of
                                    options shall remain subject to all terms
                                    and conditions set forth in the applicable
                                    stock option plans and stock option
                                    agreements. Such plan and agreements shall
                                    be considered amended for all purposes to
                                    the extent inconsistent with the terms
                                    hereof.

         9.       Bedell confirms that he has delivered and returned to the
                  Company any and all property of the Company (including but not
                  limited to laptops computers, files, records, computer disks
                  and related materials, office access keys and office
                  equipment) in good condition, ordinary wear and tear excepted.

         10.      Bedell will refrain from disparaging the Company or its
                  services, products, directors, agents, or employees in any
                  manner, and from any other action that may lead to the
                  impairment of the Company's reputation and good standing in
                  the community and industry, or that may interfere with its
                  relationships with others with whom it does business, or with
                  its customers or employees, except as may be necessary to
                  comply with a valid order, subpoena or law and after
                  reasonable notice has been given to the Company that Bedell is
                  or may become under a legal duty to make disparaging remarks,
                  opinions or disclosures. The Company's officers and directors
                  will refrain from disparaging, in any manner, Bedell's
                  personal or business reputation or standing in the community
                  and industry, and, subject to Section 14 below, from
                  interfering with Bedell's pursuit of other gainful employment,
                  except as may be necessary to comply with a valid order,
                  subpoena or law and after reasonable notice has been given to
                  Bedell that the Company is or may become under a legal duty to
                  make disparaging remarks, opinions or disclosures.

         11.      Bedell will cooperate fully with the Company and its attorneys
                  concerning any current or future litigation or other legal
                  matter affecting the Company, to the extent that Bedell has or
                  may have knowledge of facts pertaining thereto. The Company
                  will strive to minimize the amount of time required of Bedell,
                  if any, for this purpose. Bedell will be reimbursed for
                  reasonable out-of-pocket expenses incurred in connection
                  therewith. In addition, after July 1, 2001, Bedell will be
                  compensated at a rate of $100 per hour, or $1,000 per day
                  unless an alternative mutually acceptable agreement is
                  negotiated.

         12.      Bedell does, for himself and his heirs, agents, executors,
                  administrators, and assigns hereby RELEASE and FOREVER
                  DISCHARGE the Company and its directors, officers, employees,
                  agents, successors, assigns, and affiliated entities from any
                  and all claims, actions, and causes of action of whatever kind
                  or nature, which he may now have or ever may have had against
                  the said releasees, whether known or unknown to him, such as
                  may have arisen in whole or in part at any time prior to the
                  execution of this Agreement. The claims being waived by virtue
                  of this Agreement include, but are not limited to those
                  arising under

                  o        The Age Discrimination in Employment Act, 29 U.S.C.
                           Section 621, et seq.;

                  o        The Americans with Disabilities Act, 42 U.S.C.
                           Section 12101, et seq.;

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                  o        The Family & Medical Leave Act, 29 U.S.C. Section
                           2601, et seq.;

                  o        Title VII of the Civil Rights Act of 1964, as
                           amended, 42 U.S.C. Section 2000e, et seq.;

                  o        The Texas Commission on Human Rights Act, Labor Code
                           Section 21.001, et seq.;

                  o        Chapter 451, Texas Labor Code; and

                  o        The common or statutory laws of the United States or
                           the State of Texas, whether in tort or in contract,
                           and SPECIFICALLY INCLUDING ANY CLAIM BEDELL MIGHT
                           MAKE FOR NEGLIGENCE.

                  Bedell also promises that he will not file any sort of lawsuit
                  or claim against the releasees in any court of law or with any
                  federal, state or local governmental agency. The claims
                  released hereby do not include any obligations of the Company
                  under this Agreement.

         13.      The Company does, for itself and its directors, officers,
                  employees, agents, successors, assigns, and affiliated
                  entities hereby RELEASE and FOREVER DISCHARGE Bedell and his
                  heirs, agents, executors, administrators, and assigns from any
                  and all claims, actions, and causes of action of whatever kind
                  or nature, which it may now have or ever may have had against
                  the said releasees, whether known or unknown to the Company,
                  such as may have arisen in whole or in part at any time prior
                  to the execution of this Agreement. The claims being waived by
                  virtue of this Agreement include, but are not limited to ANY
                  CLAIMS THE COMPANY MIGHT MAKE FOR NEGLIGENCE. The Company also
                  promises that it will not file any sort of lawsuit or claim
                  against the releasees in any court of law or with any federal,
                  state or local governmental agency. The claims released hereby
                  do not include any obligations of Bedell under this Agreement.

         14.      Until July 1, 2002, Bedell, without the prior written
                  permission of the Chief Executive Officer of the Company,
                  shall not, anywhere in the United States of America (i) be
                  employed by, or render any services to, any person, firm or
                  corporation engaged in ice manufacturing and distribution or
                  cold storage businesses ("Competitive Business"); (ii) engage
                  in any Competitive Business for his own account; (iii) be
                  associated with or interested in any Competitive Business as
                  an individual, partner, shareholder, creditor, director,
                  officer, principal, agent, employee, trustee, consultant,
                  advisor or in any other relationship or capacity (except
                  ownership of up to 4.9% of the common stock of a publicly
                  traded entity engaged or having an interest in a Competitive
                  Business); (iv) employ or retain, or have or cause any other
                  person or entity to employ or retain, any person who is
                  employed by the Company; or (v) solicit, interfere with, or
                  endeavor to entice away from the Company, for the benefit of a
                  Competitive Business, any of its customers or other persons
                  with whom the Company has a contractual relationship.

                  As a result of Bedell's prior employment with the Company, he
                  has obtained secret and confidential information (and as a
                  result of this Agreement, Bedell will obtain secret and
                  confidential information) concerning the business of the
                  Company and its subsidiaries and affiliates (referred to
                  collectively as the "Company"), including, without limitation,
                  financial information, designs and other proprietary rights,
                  trade secrets and "know-how," customers and sources
                  ("Confidential Information"). Bedell agrees that he will not
                  at any time divulge to any person or entity any Confidential
                  Information obtained or learned by him as a result of his

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                  employment with the Company, except (i) with the Company's
                  express written consent; (ii) to the extent that any such
                  information is in the public domain other than as a result of
                  Bedell's breach of any of his obligations hereunder; or (iii)
                  where required to be disclosed by court order, subpoena or
                  other government process.

15.               In the event Bedell materially breaches this Agreement, Bedell
                  agrees that all unexercised stock options in the Company held
                  by him shall terminate, it being understood that new grants,
                  vesting and extended exercise periods are in consideration of
                  Bedell's covenants and agreements hereunder. Notwithstanding
                  the foregoing, the Company shall have all other rights and
                  remedies to which it is entitled under law in the event Bedell
                  breaches this Agreement.

         16.      For a period of one year commencing July 1, 2001, Bedell
                  agrees to provide consulting on an as needed basis. Telephonic
                  consulting of up to one-half hour per call will be at no
                  additional consideration. Such telephone consulting must be
                  arranged so as not to interfere with Bedell's schedule. Time
                  spent in excess of the above telephone consulting will be
                  billed at $100 per hour, up to a maximum of $1,000 per day.
                  All out of pocket expenses, including, without limitation,
                  travel, long distance telephone charges, facsimile charges,
                  delivery charges, copy and reproduction costs will be
                  reimbursed by the Company in accordance with its normal and
                  customary reimbursement policies and procedures. In addition,
                  the Company agrees to allow Bedell to maintain a voice mail
                  phone line for one year.

         17.      No waiver of any of the provisions of this Agreement shall be
                  deemed, or shall constitute, any waiver of any other
                  provision, whether or not similar. No waiver shall constitute
                  a continuing waiver. No waiver shall be binding unless
                  executed in writing by the party charged with the waiver. In
                  the event any provision of this Agreement shall finally be
                  determined to be unlawful, such provision shall be deemed to
                  be severed from this Agreement and every other provision of
                  this Agreement shall remain in full force and effect. If,
                  moreover, any one or more of the provisions contained in this
                  Agreement shall for any reason be held to be excessively
                  broad, it shall be construed, by limiting and reducing it, so
                  as to be enforceable to the extent compatible with the
                  applicable law as it shall then appear.

         18.      This Agreement contains the complete and exclusive expression
                  of all promises and representations made between the parties.
                  Except as stated above, this Agreement supersedes and replaces
                  all prior agreements and understandings between the parties,
                  both written and oral. No additional or contrary promise or
                  representation, or any amendments to this Agreement, shall be
                  binding upon either party unless reduced to writing and signed
                  by Bedell and a duly authorized officer of the Company on a
                  date subsequent to the date of execution of the present
                  Agreement.

         19.      Bedell acknowledges that, with reference to the execution of
                  this Agreement,

                  o        The consideration to be received by Bedell pursuant
                           to this Agreement exceeds that which is owed to him
                           by law;

                  o        Bedell has been advised in writing to consult with an
                           attorney prior to executing this Agreement;

                  o        Bedell has waived any right to consider this
                           Agreement for 21 days; and

                  o        Bedell understands that, for a period of seven (7)
                           days following his execution of this Agreement, he
                           may revoke it, and that the agreement created by this
                           document shall not become effective or enforceable
                           until after seven (7) days.

         20.      This Agreement shall be governed by and construed in
                  accordance with the laws of the State of Texas.

         21.      Nothing contained in this Agreement shall be construed in any
                  way as an admission by the

                                       4
<PAGE>   5

                  Company or Bedell that either of them has acted wrongfully
                  with respect to the other or with respect to any other person,
                  and each party specifically disclaims any liability to, or
                  wrongful acts against, the other, on the part of themselves or
                  their representatives, affiliates, associates, employees or
                  agents.

         22.      Neither party may assign this Agreement to anyone without the
                  express prior written consent of the other party hereto, which
                  consent shall not be unreasonably withheld, except that the
                  Company may assign this Agreement to a successor by merger or
                  sale of substantially all of the Company's business. Upon any
                  such assignment by the Company, the Company shall remain
                  liable for its obligations hereunder and the successor or
                  assignee shall expressly assume such obligations. This
                  Agreement shall inure to the benefit of Bedell's heirs or
                  legatees upon his death or disability and to the benefit of
                  any permitted assigns.

         23.      This Agreement shall survive the death or disability of Bedell
                  and all the rights and entitlements of Bedell under this
                  Agreement and any relevant option plans and agreements shall
                  inure to the benefit of Bedell's personal representatives,
                  heirs, administrators and executors and shall be binding on
                  the Company and its successors and assigns.

         IN WITNESS WHEREOF, the parties have affixed their signatures in the
spaces provided on this 5th day of June, 2001.

PACKAGED ICE, INC.

By:      /s/ Jimmy C. Weaver                           /s/ Leonard A. Bedell
   ----------------------------------------       ------------------------------
Name:      Jimmy C. Weaver                             LEONARD A. BEDELL
      -------------------------------------
Title:     President & COO
        -----------------------------------

                                       5

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