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FIFTH AMENDMENT TO LOAN AGREEMENT
AND LOAN DOCUMENTS
This Fifth Amendment to Loan Agreement and Loan Documents (the
"Agreement") is among LANCER CORPORATION, A TEXAS CORPORATION (the "Borrower"),
LANCER INTERNATIONAL SALES, INC., A TEXAS CORPORATION ("Lancer International")
and FIRST INTERSTATE BANK OF TEXAS, N.A. (the "Lender").
R E C I T A L S
WHEREAS, the Borrower and the Lender entered into a Loan Agreement
dated July 24, 1991 (the "Original Loan Agreement"), the terms and provisions
of which Original Loan Agreement are incorporated in this Agreement by this
reference for all purposes;
WHEREAS, the Borrower and the Lender amended the Original Loan
Agreement in an Amendment to Loan Agreement and Loan Documents (the "First
Amendment") dated effective May 15, 1992, in a Second Amendment to Loan
Agreement and Loan Documents dated effective May 15, 1993 (the "Second
Amendment"), in a Third Amendment to Loan Agreement and Loan Documents dated
effective April 8, 1994 (the "Third Amendment"), and most recently in a Fourth
Amendment to Loan Agreement and Loan Documents dated effective July 29, 1994
(the "Fourth Amendment") the terms and provisions of which First Amendment,
Second Amendment, Third Amendment and Fourth Amendment are incorporated into
this Agreement by this reference for all purposes (all subsequent references to
the Original Loan Agreement, as modified by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment and this Agreement being
collectively referred to herein as the "Loan Agreement");
WHEREAS, the Loan Agreement concerns all of the Loans from the Lender
to the Borrower, including specifically, a Revolving Note in the original
principal sum of $8,000,000.00;
WHEREAS, the Loans are secured by the Collateral described in the Loan
Documents, which Loan Documents include, without limitation, a Security
Agreement dated July 24, 1991, executed by the Borrower in favor of the Lender,
which covers, in part, the Borrower's Inventory and Accounts, and a Security
Agreement dated effective May 15, 1992, executed by Lancer International in
favor of the Lender, which covers, in part, Lancer International's Inventory
and Accounts, and the Deeds of Trust described in a Fourth Modification of
Deeds of Trust dated of even date herewith;
WHEREAS, the Borrower has requested that the Lender make a new
$1,000,000.00 term loan available to an affiliate of the Borrower, Nueva
Distribuidora Lancermex S.A. de C.V., all in accordance with the terms stated
in this agreement;
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WHEREAS, the Borrower and the Lender desire, as evidenced by this
Agreement, to make certain amendments to the Loan Agreement and to the Loan
Documents and to ratify the continued force and effect of the Loan Documents;
NOW, THEREFORE, in consideration of the financial accommodations
extended to the Borrower by the Lender and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the
undersigned, the Borrower, the Subsidiaries and the Lender agree as follows:
1. The first sentence of Section 1.1 of the Original Loan
Agreement is restated as follows:
1.1. Description of the Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties made by the Borrower, the
Lender agrees to make available to the Borrower an
$8,000.000.00 revolving credit as evidenced by a revolving
promissory note (the "Revolving Note") in substantially the
form attached hereto as Exhibit "A" and to make available to
Nueva Distribuidora Lancermex S.A. de C.V. a $1,000,000.00
term credit as evidenced by a promissory note (the "Term
Note") in substantially the form attached hereto as Exhibit
"E". All loans from the Lender to the Borrower and to the
Borrowers affiliate, Nueva Distribuidora Lancermex S.A. de
C.V., whether now existing or hereafter arising, will be
referred to herein collectively as the "Loans".
2. The following Section 3.7 of the Original Loan Agreement is
restated as follows:
3.7. Subsidiaries. The Borrower has no subsidiaries except
LANCER INTERNATIONAL, LANCER LIMITED, INDUSTRIAS LANCERMEX
S.A. de C.V., SERVICIOS LANCERMEX S.A. de C.V., formerly known
as Distribuidora Lancermex S.A. de C.V. and NUEVA
DISTRIBUIDORA LANCERMEX S.A. de C.V.
3. The Borrower reaffirms the representations and warranties
contained in Section 3 of the Loan Agreement and confirms that
said representations and warranties are true and correct as of
the effective date of this Agreement:
4. Section 4.14 of the Original Loan Agreement is restated as
follows:
4.14. Maintain Life Insurance. Maintain in force a
$5,000,000.00 policy of insurance on the life of Xxxxxx
Xxxxxxxxx, which policy shall be pledged to secure the Loans.
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5. The Loan Documents secure, in addition to the Revolving Note,
the Term Note described in this Agreement.
6. Lancer International and Lancer Limited join in the execution
of this Agreement to evidence their consent to the terms
hereof and their ratification of their obligation to guarantee
repayment of the Revolving Note, as described in this
agreement, pursuant to separate Guaranty Agreements, each
dated on or about May 19, 1992.
7. The Lender releases Industrias Lancermex S.A. de C.V. and
Servicios Lancermex S.A. de C.V., formerly known as
Distribuidora Lancermex. S.A. de C.V., from their obligations
to guarantee repayment of the Loans, pursuant to the terms of
separate Guaranty Agreements, each dated on or about May 19,
1992.
8. The Borrower ratifies, affirms, acknowledges and agrees that
the Loan Documents, and each and every document and instrument
which secures payment of the Loans, represent the valid,
enforceable, and collectible obligations of the parties
thereto and further acknowledge that there are no existing
claims, defenses, whether personal or otherwise, or rights of
set-off whatsoever with respect to any of the instruments or
documents described specifically or by reference in this
Agreement, and the Borrower further acknowledges and
represents that no event has occurred and no condition exists
which would constitute a Default under the Loan Agreement
either with or without notice or lapse of time.
9. This Agreement in no way acts as a release or a relinquishment
of the liens, security interests and rights (the "Liens")
securing payment of the Loans, including without limitation,
the security interests created by the security agreements
specifically referenced in this Agreement. The Borrower and
Lancer International renews, extends and ratifies all of said
Liens.
10. The Loan Documents and all other documents and instruments
executed in connection with the Loans shall be governed and
construed according to the laws of the State of Texas from
time to time in effect, except to the extent United States
federal law preempts Texas law.
11. This Agreement shall be binding upon and inure to the benefit
of the Lender, the Borrower and the Subsidiaries and their
respective heirs, successors and assigns.
12. Arbitration. This Agreement and the other Loan Documents
shall be subject to the terms and conditions of the
Arbitration Program as described on Exhibit "D" attached
hereto and incorporated herein by this reference for all
pertinent purposes.
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EXECUTED in multiple counterparts effective as of November 8, 1994.
LANCER CORPORATION, A TEXAS
CORPORATION
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Xxxxxx Xxxxx
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LANCER INTERNATIONAL SALES, INC.,
A TEXAS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: President
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FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: President
-----------------------------
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AGREED:
LANCER LIMITED
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
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Title: President
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NUEVA DISTRIBUIDORA LANCERMEX S.A. DE C.V.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: President
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