THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this Amendment) is entered into as of
July 15, 1998, among LANCER PARTNERSHIP, LTD., a Texas limited partnership
(Operating Subsidiary), and LANCER DE MEXICO, S.A. de C.V., formerly known as
NUEVA DISTRIBUIDORA LANCERMEX, S.A. de C.V., a corporation organized under the
laws of Mexico (Mexico Subsidiary) (Operating Subsidiary and Mexico Subsidiary
are hereinafter referred to individually as a Borrower and collectively as
Borrowers); LANCER CORPORATION, a Texas corporation (Parent Company);
LAN-LEASING, INC., a Delaware corporation, (Lan-Leasing), LANCER CAPITAL
CORPORATION, a Delaware corporation (Lancer Capital) and LANCER INTERNATIONAL
SALES, INC., a Texas corporation (Lancer International) (Lan-Leasing, Lancer
Capital, Lancer International and Operating Subsidiary, individually, a
Guarantor and collectively, the Guarantors); and THE FROST NATIONAL BANK, a
national banking association, individually and as agent for the Banks acting in
the manner and to the extent provided in Article 8 (in such capacity, the
Agent), NATIONSBANK, N.A., a national banking association, successor to THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS, individually, and each of the lenders
which becomes a party hereto as provided in Section 10.7 (individually, a Bank
and collectively, the Banks).
Recitals
I. Borrowers, the Parent Company, the Agent and the other Banks have heretofore
entered into the Credit Agreement dated as of July 15, 1996 (as amended,
modified, restated and supplemented from time to time, the Credit Agreement).
II. Borrower has requested that the Banks agree to increase their aggregate
Revolving Commitments from $30,000,000 to $35,000,000 until July 15, 2001, and
to modify certain of the covenants contained in Section 6.1(g) of the Credit
Agreement.
III. The Banks are willing to agree to such requested change on the terms
and conditions set forth in this Amendment.
Agreements
In consideration of the foregoing premises, the mutual agreements contained
herein and other good and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
A. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the respective meanings set forth in
the Credit Agreement.
1
B. Amendments. The Credit Agreement is hereby amended as follows:
1. Extension of Increase in Revolving Commitments. To reflect the
increase in the aggregate Revolving Commitments of all Banks from
$30,000,000 to $35,000,000 until July 15, 2001, Annex A attached to the
Credit Agreement is hereby amended and replaced with Annex A attached to
this Amendment. All references in the Credit Agreement and other Loan
Documents to the Revolving Commitments of the Banks shall thereafter refer
to such revised amounts.
2. Renewal Revolving Notes. To evidence Revolving Loans made to
Operating Subsidiary by each Bank up to the amount of such Bank's Revolving
Commitment, as revised hereby, Operating Subsidiary shall execute and
deliver to each Bank a Renewal Revolving Note in the form attached hereto
as Exhibit A, payable to the order of such Bank and in a stated principal
amount equal to such Bank's Revolving Commitment, as revised hereby. On the
date hereof, Borrower shall execute and deliver to each Bank such a Renewal
Revolving Note as a renewal, modification and increase of the existing
Renewal Revolving Note issued to such Bank pursuant to the Credit
Agreement. All references in the Credit Agreement and the other Loan
Documents to the Revolving Notes of the Banks shall hereafter refer to the
Renewal Revolving Notes executed and delivered pursuant to this Amendment,
as further amended, modified, restated, supplemented, renewed, extended,
increased, refinanced and/or replaced from time to time.
3. Section 6.1(g) is hereby amended to read in its entirety as
follows:
(g) the ratio of (i) Total Funded Debt as of the end of any Fiscal
Quarter to (ii) Consolidated EBITDA for the four-quarter period ending as
of the end of such Fiscal Quarter, to be more than set out below opposite
the period in which such Fiscal Quarter ends; provided, however, for each
Fiscal Quarter in which an Acquisition is consummated, and each Fiscal
Quarter ending prior thereto, the financial information necessary to
determine Consolidated EBITDA shall be adjusted to reflect, on a pro forma
basis, such Acquisition as if it had occurred as of the beginning of the
first of such Fiscal Quarters included in the relevant four-quarter
measurement period:
Fiscal Quarters Ended On or About Ratio
Closing Date through 9/30/97 3.00 to 1.00
10/1/97 through 6/30/98 3.25 to 1.00
7/1/98 through 6/30/99 3.00 to 1.00
7/1/99 through 6/30/00 2.75 to 1.00
7/1/00 through 7/15/01 2.50 to 1.00
2
4. Exhibit M -- Compliance Certificate is hereby amended to
incorporate the following change to the Maximum Ratio for purposes of
Section 6.1(g) of the Credit Agreement (Total Funded Debt to Consolidated
EBITDA) as set forth therein:
Fiscal Quarters Ended On or About Ratio
Closing Date through 9/30/97 3.00 to 1.00
10/1/97 through 6/30/98 3.25 to 1.00
7/1/98 through 6/30/99 3.00 to 1.00
7/1/99 through 6/30/00 2.75 to 1.00
7/1/00 through 7/15/01 2.50 to 1.00
C. In order to induce the Agent and the Banks to enter into this
Amendment, each Borrower hereby represents and warrants to the Agent and
the Banks that, as of the date of this Amendment, (a) the representations
and warranties set forth in the Credit Agreement and each other Loan
Document are true and correct as if made on and as of the date hereof
(other than those representations and warranties expressly limited by their
terms to a specific date), (b) no Default or Event of Default has occurred
and is continuing, and (c) no event has occurred since the date of the most
recent financial statements delivered pursuant to Section 5.1 of the Credit
Agreement that has caused a Material Adverse Effect.
D. Each Borrower hereby acknowledges and agrees that no facts events
status or conditions presently exist which, either now or with the passage
of time or the giving of notice or both, presently constitute or will
constitute a basis for any claim or cause of action against any of the
Banks, or any defense to the payment of any of the indebtedness evidenced
or to be evidenced by any of the Loan Documents.
E. Parent Company covenants and agrees that, as to the Parent Guaranty
executed and delivered by Parent Company in favor of the Banks as part of
the Loan Documents, (a) the Parent Guaranty is an unconditional guarantee
of payment and performance and not of collection, (b) the Parent Guaranty
represents the primary, absolute and unconditional obligation of Parent
Company and (c) the Parent Guaranty is a continuing guarantee and shall
remain in full force and effect until the termination of the obligations of
the Banks to make Loans and the indefeasible payment in full of the
Obligations (as defined in the Parent Guaranty).
F. Each of the undersigned Guarantors covenants and agrees that, as to
the Affiliate Guaranty executed and delivered by such Guarantor in favor of
the Banks as part of the Loan Documents, (a) such Affiliate Guaranty is an
unconditional guarantee of payment and performance and not of collection,
(b) such Affiliate Guaranty represents the primary, absolute and
unconditional obligation of such Guarantor, and (c) such Affiliate Guaranty
is a continuing guarantee and shall remain in full force and effect until
the termination of the obligations of the Banks to make Loans and the
indefeasible payment in full of the Obligations (as defined in each such
Affiliate Guaranty).
3
G. As to the Stock Pledge Agreement executed and delivered by Parent
Company in favor of the Banks as a part of the Loan Documents, Parent
Company hereby ratifies and confirms the liens and security interests of
the Banks in and to all collateral covered by the Stock Pledge Agreement as
security for the prompt and full payment and performance of the obligations
secured by the Stock Pledge Agreement. In furtherance of the foregoing, all
liens and security interests of the Stock Pledge Agreement (which are
hereby acknowledged to be valid and subsisting) are hereby carried forward,
continued, extended, modified and renewed to secure the prompt and full
payment and performance of the obligations secured by the Stock Pledge
Agreement.
H. Each Loan Document is hereby amended and modified to the extent
necessary to give full force and effect to the terms of this Amendment, and
each such Loan Document shall hereafter be construed and interpreted after
giving full force and effect to the terms of this Amendment. As amended,
modified and supplemented pursuant to this Amendment, each Borrower, Parent
Company and each Guarantor hereby ratify, confirm and restate each Loan
Document and agrees that each such Loan Document to which it is a party
shall continue in full force and effect. Each of the Loan Documents now or
hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement, as amended hereby, or as further
evidence of or in connection with the Credit Agreement, as amended hereby,
are hereby amended to the extent necessary so that any reference in any
such documents, instruments or agreements to the Credit Agreement shall be
a reference to the Credit Agreement as amended hereby.
I. In the event that any one or more of the provisions contained in
this Amendment shall be determined invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any
such provision or provisions in every other respect and the remaining
provisions of this Amendment shall not be impaired in any way.
J. When required or implied by the context used, defined terms used
herein shall include the plural as well as the singular, and vice versa.
K This Amendment shall be governed by and construed in accordance with
the internal laws of the State of Texas and applicable federal laws of the
United States of America. This Amendment has been entered into in Bexar
County, Texas and shall be performable for all purposes in Bexar County,
Texas. The courts within the State of Texas shall have jurisdiction over
any and all disputes arising under or pertaining to this Amendment; and any
such dispute shall be heard in the county or judicial district of the
principal place of business of The Frost National Bank.
L. This Amendment shall be binding upon and inure to the benefit of
all parties hereto and their respective successors and assigns; provided,
however, that neither of the Borrowers nor any of their respective
successors or assigns may, without the prior written consent of all of the
Banks, assign any rights, powers, duties or obligations hereunder.
4
M. This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken
together shall constitute but one and the same instrument.
N. This Amendment constitutes a Loan Document.
O. Upon execution of this Amendment by the Banks, each Borrower,
Parent Company and each of the Guarantors shall deliver to the Agent, in
form and substance satisfactory to the Agent, the certificates and
documents described on Annex B.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized signatories as of the day
and year first above written.
OPERATING SUBSIDIARY:
LANCER PARTNERSHIP, LTD., a Texas
limited partnership
By: Lancer Capital Corporation, a Delaware
corporation, general partner
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
5
MEXICO SUBSIDIARY:
LANCER DE MEXICO, S.A. de C.V.,
formerly known as NUEVA
DISTRIBUIDORA LANCERMEX, S.A. de C.V.
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
PARENT COMPANY:
LANCER CORPORATION
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
GUARANTORS:
LAN-LEASING, INC.
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
LANCER CAPITAL CORPORATION
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
LANCER INTERNATIONAL SALES, INC.
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
LANCER PARTNERSHIP, LTD., a Texas
limited partnership
By: Lancer Capital Corporation, a Delaware
corporation, general partner
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
6
AGENT/BANKS:
THE FROST NATIONAL BANK,
Individually and as the Agent
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Asst. Vice President
NATIONSBANK, N.A., successor to THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS
By:/s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
7
