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EIGHTH AMENDMENT TO LOAN AGREEMENT
AND LOAN DOCUMENTS
This Eighth 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"),
LANCER LIMITED ("Lancer Limited") 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"), in a Fourth Amendment to Loan
Agreement and Loan Documents dated effective July 29, 1994 (the "Fourth
Amendment"), in a Fifth Amendment to Loan Agreement and Loan Documents dated
effective November 8, 1994 (the "Fifth Amendment"), in a Sixth Amendment to
Loan Agreement and Loan Documents dated effective June 30, 1995 (the "Sixth
Amendment") and most recently in a Seventh Amendment to Loan Agreement and Loan
Documents dated effective August 1, 1995 (the "Seventh Amendment"), the terms
and provisions of which First Amendment, Second Amendment, Third Amendment,
Fourth Amendment, Fifth Amendment, Sixth Amendment and Seventh 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, the
Fifth Amendment, the Sixth Amendment, the Seventh Amendment and this Agreement
being collectively referred to herein as the "Loan Agreement");
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WHEREAS, the Loan Agreement concerns all of the Loans from the Lender
to the Borrower, including specifically, an existing Revolving Note in the
principal sum of $10,000,000.00;
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;
WHEREAS, the Borrower has requested that the Lender make a new
$5,000,000.00 term loan available to the Borrower, all in accordance with the
terms stated in this Agreement;
WHEREAS, the Borrower and the Lender desire, as evidenced by this
Agreement, to make certain amendments to the Loan Agreement 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 (a) to make available to the Borrower (i) a
$10,000.000.00 revolving credit as evidenced by a revolving
promissory note (the "Revolving Note") in substantially the
form attached hereto as Exhibit "A" and (ii) a $5,000,000.00
term credit as evidenced by a promissory note (the "Term
Note") in the form attached hereto as Exhibit "E", and
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(b) to make available to Nueva Distribuidora Lancermex S.A. de
C.V. a $2,500,000.00 term credit as evidenced by a promissory
note (the "Lancermex Note") in substantially the form attached
hereto as Exhibit "F".
2. Exhibit "E" attached to the Loan Agreement is replaced by
Exhibit "E" attached to this Agreement.
3. The Term Note described in this Agreement is secured by a new
Security Agreement dated of even date with this Agreement
covering the Borrower's Equipment. However, the other Loan
Documents do not secure the Term Note described in this
Agreement and the security interests created by the new
Security Agreement described in the prior sentence do not
secure any of the Loans, except for the Term Note described in
this Agreement.
4. 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.
5. Section 4.14 of the Original Loan Agreement, which concerns
life insurance on Xxxxxx Xxxxxxxxx, is deleted.
6. 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
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Default under the Loan Agreement either with or without notice
or lapse of time.
7. 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.
8. 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.
9. AGREEMENT FOR BINDING ARBITRATION. The parties agree to be
bound by the terms and provisions of the current Arbitration
Program of First Interstate Bank of Texas, N.A., which is
incorporated by reference herein and is acknowledged as
received by the parties, pursuant to which any and all
disputes shall be resolved by mandatory binding arbitration
upon the request of either party.
EXECUTED in multiple counterparts effective as of December 29th, 1995.
LANCER CORPORATION, A TEXAS
CORPORATION
By: /s/ XXXX X. XXXXXXX
________________________________
Name: Xxxx X. Xxxxxxx
______________________________
Title: Vice President of Finance
_____________________________
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LANCER INTERNATIONAL SALES, INC.,
A TEXAS CORPORATION
By: /s/ XXXX X. XXXXXXX
________________________________
Name: Xxxx X. Xxxxxxx
______________________________
Title: Vice President of Finance
______________________________
LANCER LIMITED
By: /s/ XXXXXXXXX X. XXXXXXX, III
________________________________
Name: Xxxxxxxxx X. Xxxxxxx, III
______________________________
Title: Director & Secretary
______________________________
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ XXXXXXX X. XXXXXX
_________________________________
Name: Xxxxxxx X. Xxxxxx
______________________________
Title: Senior Vice President
______________________________
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PROMISSORY NOTE
$5,000,000.00 December 29, 1995
For value received, LANCER CORPORATION, A TEXAS CORPORATION (the
"Makers," whether one or more), promise to pay to the order of FIRST INTERSTATE
BANK OF TEXAS, N.A., A NATIONAL BANKING ASSOCIATION (the "Payee"), at 000 X.
Xx. Xxxx'x, Xxxxx 000, Xxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx 00000, or such other
location as the Payee designates to the Makers in writing, the principal sum of
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) in legal and lawful money of
the United States of America, with interest thereon from the date hereof until
paid at the rate of seven and three-quarters percent (7.75%) per annum
(calculated on the basis of a year of 360 days for the actual number of days
elapsed), the interest being payable as hereinafter specified. Matured unpaid
principal and accrued, matured, unpaid interest shall bear interest from the
date ten (10) days after maturity (whether by acceleration or otherwise) until
paid at the rate of eighteen percent (18%) per annum, but in no event greater
than the Maximum Lawful Rate. The term "Maximum Lawful Rate," as used herein,
means the greater of (i) the highest rate permitted by applicable United States
law, or (ii) a rate per annum equal to the indicated rate ceiling determined in
accordance with the computation specified in Article 5069-1.04(a) (1),
Vernon's Texas Civil Statutes, 1925, as amended, as such indicated rate ceiling
is in effect from time to time during the term hereof, subject to the
provisions of Article 5069-1.04(b), Vernon's Texas Civil Statutes, 1925, as
amended.
TERMS OF PAYMENT:
Principal and interest shall be due and payable in installments of
$121,478.71 each, commencing on January 31, 1996, and continuing regularly
thereafter on the last day of each calendar month until December 31, 1999, when
the entire amount of this Note, principal and accrued interest then remaining
unpaid, shall be due and payable. Interest shall be calculated on the unpaid
principal to the date each installment is paid and each such payment shall be
credited to the discharge of the interest accrued, the reduction of principal,
and other authorized charges, if any, in such manner and order as the Payee
shall determine in its sole discretion.
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PAYMENT ON NON-BUSINESS DAYS:
If any payment hereunder falls due on a Saturday, Sunday or public
holiday on which commercial banks in San Antonio, Texas are permitted or
required by law to be closed, the time for such payment shall be extended to
the next day on which the Payee is open for business, and such extension of
time shall be included in the calculation of interest accruing and payable
hereunder.
PREPAYMENT:
During the first two (2) calendar years following the date of this
Note, the Makers shall be entitled to make prepayments of principal on this
Note only upon payment of a prepayment premium in an amount equal to one
percent (1%) of the amount of the principal prepayment. Thereafter, the Makers
shall have the right to prepay this Note in any amount at any time prior to
maturity without penalty. Interest shall be calculated on the unpaid principal
to the date of any prepayment and any such prepayment shall be applied first
toward the payment of accrued interest and next to the principal installments
of this Note in the inverse order of maturity.
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SECURITY FOR PAYMENT:
Payment of this Note is secured by, and this Note is entitled to the
benefits of, all security agreements, assignments, deeds of trust, mortgages
and lien instruments executed by the Makers (or any of them), or other similar
instruments, guaranties, endorsements or other agreements, executed by any
other person or entity (the "Collateral Agreements," whether one or more) to
secure, guarantee or otherwise provide for the payment hereof, in favor of or
for the benefit of the Payee, including any previously executed and any now or
hereafter executed. Without limiting the foregoing, the Collateral Agreements
include a security agreement of even date herewith executed by the Makers, as
debtor, in favor of the Payee, as secured party, covering certain equipment of
the Makers.
USE OF PROCEEDS:
A portion of the proceeds of this Note is being used to refinance
other indebtedness owed to CIT Group by the Makers and the remainder of such
proceeds will be advanced to the Makers at the Makers' special instance and
request for the purpose of providing additional working capital.
REPRESENTATIONS AND WARRANTIES:
LANCER CORPORATION expressly represents and warrants to the Payee that
it is a corporation duly organized and existing in good standing under the laws
of the State of Texas; that it possesses full power and authority to conduct
its business as now conducted and as presently proposed to be conducted; that
the execution and delivery of this Note will not contravene any provisions of
its articles of incorporation or by-laws; that the officer executing this Note
is the legally elected, qualified and acting officer of said corporation and is
expressly authorized to execute this Note by resolution of the board of
directors of said corporation.
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LIMITATION OF INTEREST:
All agreements and transactions among the Makers and the Payee,
whether now existing or hereafter arising, whether contained herein or in any
other instrument, and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration
of the maturity hereof, late payment, prepayment, or otherwise, shall the
amount of interest contracted for, charged or received by the Payee from the
Makers for the use, forbearance, or detention of the principal indebtedness or
interest hereof, which remains unpaid from time to time, exceed the Maximum
Lawful Rate, it particularly being the intention of the parties hereto to
conform strictly to the applicable usury laws of the Xxxxx xx Xxxxx (xx
xxxxxxxxxx Xxxxxx Xxxxxx law to the extent that it permits the Payee to
contract for, charge or receive a greater amount of interest than under Texas
law). Any interest payable hereunder or under any other instrument relating to
the indebtedness evidenced hereby that is in excess of the Maximum Lawful Rate,
shall, in the event of acceleration of maturity, late payment, prepayment, or
otherwise, be applied to a reduction of the unrepaid indebtedness hereunder and
not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of such unrepaid indebtedness, such excess shall be refunded to
the Makers. To the extent not prohibited by applicable law, determination of
the Maximum Lawful Rate shall at all times be made by amortizing, prorating,
allocating and spreading in equal parts during the full term of this loan, all
interest at any time contracted for, charged or received from the Makers in
connection with this loan, so that the actual rate of interest on account of
such indebtedness is uniform throughout the term thereof.
SUCCESSORS AND ASSIGNS:
As used herein, the term "Payee" shall include the successors and
assigns of the Payee and any subsequent owner and holder of this Note, and the
term "Makers" shall include co-makers, endorsers, guarantors, sureties and
their respective successors and assigns.
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DEFAULT AND COLLECTION:
It is expressly provided that, upon default in the punctual payment of
this Note, or any part hereof, principal or interest, as the same shall become
due and payable, or upon default in the performance of or compliance with any
of the terms of any of the Collateral Agreements, or if the Payee deems the
Payee insecure, either because the prospect of timely payment of this Note
becomes impaired, or because the prospect of timely performance of any of the
Collateral Agreements becomes impaired, at the option of the Payee, the entire
indebtedness evidenced hereby shall be matured, and in the event default is
made in the prompt payment of this Note when due or declared due, and the same
is placed in the hands of an attorney for collection, or suit is brought on the
same, or the same is collected through probate, bankruptcy or other judicial
proceedings, then the Makers jointly and severally agree and promise to pay all
reasonable attorney's fees, court costs and collection costs incurred by the
Payee.
WAIVERS AND CONSENTS:
Each of the Makers waives presentment for payment, notice of intent to
accelerate, notice of acceleration, protest and notice of protest, dishonor and
diligence in collecting and the bringing of suit against any other party, and
agrees to all renewals, extensions, partial payments, releases and
substitutions of security, in whole or in part, with or without notice, before
or after maturity. The Payee may remedy any default, without waiving the same,
or may waive any default without waiving any prior or subsequent default.
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GOVERNING LAWS AND VENUE:
This Note is governed by and is to be construed and enforced in
accordance with the laws of the Xxxxx xx Xxxxx xxx xx xxx Xxxxxx Xxxxxx. The
Makers agree and consent to the jurisdiction of the District Courts of Bexar
County, Texas, and of the United States District Court for the Western District
of Texas (San Antonio Division) and acknowledge that such courts shall
constitute proper and convenient forums for the resolution of any actions among
the Makers and the Payee with respect to the subject matter hereof, and agree
that such courts shall be the exclusive forums for the resolution of any
actions among the Makers and the Payee with respect to the subject matter
hereof.
ARBITRATION PROGRAM:
The parties agree to be bound by the terms and provisions of the
current Arbitration Program of First Interstate Bank of Texas, N.A., which is
incorporated by reference herein and is acknowledged as received by the
parties, pursuant to which any and all disputes shall be resolved by mandatory
binding arbitration upon the request of either party.
LANCER CORPORATION, a Texas
corporation
By: /s/ Xxxx X. Xxxxxxx
________________________________
Name: Xxxx X. Xxxxxxx
______________________________
Title: Vice President of Finance
_____________________________
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SECURITY AGREEMENT
PART I. PREAMBLE
Section 1.01. Security Agreement. This Security Agreement (this
"Agreement"), dated as of December 29th, 1995, is by and between LANCER
CORPORATION, A TEXAS CORPORATION (the "Debtor"), whose address is 000 X. Xxxxx,
Xxx Xxxxxxx, Xxxxx 00000 and FIRST INTERSTATE BANK OF TEXAS, N.A., A NATIONAL
BANKING ASSOCIATION (the "Secured Party") whose address is 000 X. Xx. Xxxx'x,
Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000.
Section 1.02. Loan Agreement. This Agreement is made in accordance
with the Eighth Amendment to Loan Agreement and Loan Documents (the "Eighth
Amendment") dated of even date herewith between the Debtor and the Secured
Party (said Eighth Amendment and the Original Loan Agreement referred to
therein, as amended, being hereinafter referred to collectively as the "Loan
Agreement"). To the extent applicable and not in conflict herewith, each and
every term, definition, condition, covenant, warranty, and representation
contained in the Loan Agreement is hereby incorporated into this Agreement by
reference as if fully stated herein.
PART II. SECURITY INTEREST
Section 2.01. Grant of Security Interest. For good and valuable
consideration, the receipt of which is acknowledged, the Debtor hereby grants
to the Secured Party a security interest in the Collateral described in Part
III below to secure the payment of the obligations and indebtedness (the
"Indebtedness") described in Part IV below.
Section 2.02. Continuing Force of Security Interest. The security
interest created by this Agreement may secure future advances or a revolving
credit. The fact that from time to time the Debtor may have paid all principal
and interest of the Indebtedness will not, without the Secured Party's written
consent, discharge or affect the force and effect of this Agreement (or the
security interest created by this Agreement) as to subsequent advances.
PART III. COLLATERAL
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Section 3.01. Collateral. To secure the payment when due of any and
all Indebtedness, the Debtor hereby grants to the Secured Party a security
interest in the following, whether now owned by the Debtor, whether hereafter
acquired by the Debtor, whether now existing, or whether arising or created
hereafter (herein collectively referred to as the "Collateral"):
a) All equipment, machinery, furnishings, furniture, appliances
and accessories;
b) All accessions or appurtenances to any of the foregoing;
c) All improvements, extensions, alterations, substitutions,
replacements, renewals, and rights belonging or in any way appertaining to all
or any part of the foregoing or acquired for use in connection therewith;
d) All right, title, and interest of the Debtor to and under all
leases or agreements now existing or hereafter entered into for the use,
occupancy, or sale of the whole or any part of the foregoing;
e) All proceeds payable or to be payable under each policy of
insurance relating to the whole or any part of the foregoing;
f) All proceeds arising from the taking, conveyance, or sale of
all or any part of the foregoing (or any interest therein or right accruing
thereto) as a result of (or in lieu or anticipation of) any public or
quasi-public use under any law or the exercise of the right of appropriation,
confiscation, condemnation, or eminent domain; and
g) Without limiting any description of the foregoing, all
products and proceeds thereof.
In no event shall the assets of XXXXX XXXXXX HOLDINGS, PTY., LTD. or its
subsidiaries be encumbered by this Agreement. Furthermore, in the event the
Secured Party consents to future acquisitions by the Debtor, this Security
Agreement shall not encumber any of the assets of any new foreign subsidiaries
acquired by the Debtor.
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Section 3.02. After-Acquired Collateral. All property acquired by
the Debtor after the date of this Agreement that by the terms hereof is
required or intended to be subjected to the security interest granted or
renewed by this Agreement will, immediately upon the acquisition thereof and
without further mortgage, conveyance, or assignment, become subject to the
security interest created by this Agreement as fully as though now owned by the
Debtor and specifically described herein. Nevertheless, the Debtor will do all
such further acts and will execute, acknowledge, and deliver all such further
conveyances, mortgages, financing statements, and assurances as the Secured
Party reasonably requires for accomplishing the purposes of this Agreement,
including delivery of Collateral to the Secured Party's possession.
Section 3.03. Sale of Collateral. The inclusion of proceeds as part
of the Collateral does not authorize the Debtor to sell any of the Collateral
without the Secured Party's prior written consent.
Section 3.04 Partial Releases of New Equipment. So long as no
Event of Default has occurred which remains uncured, the Debtor may, on a
quarterly basis, forward a list of new equipment acquired since the date of
this Agreement to the Secured Party, and the Secured Party shall release its
security interests in said new equipment and, at the Debtor's expense, file a
partial release covering such new equipment with the Texas Secretary of State's
Office.
PART IV. DEBTOR'S PAYMENT OBLIGATIONS
Section 4.01. Promise To Pay. The Debtor will pay the Secured Party,
in accordance with the terms of such Indebtedness and the terms of this
Agreement, all sums that may become due pursuant to the Indebtedness and all
renewals, rearrangements, or extensions of any such Indebtedness. The Debtor
will pay the Secured Party on demand the entire unpaid Indebtedness, whether
created or incurred pursuant to this Agreement or otherwise, upon the
occurrence of an Event of Default (as defined in Part VI hereof).
Section 4.02. Indebtedness. The Indebtedness is:
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a) The indebtedness represented by a promissory note
(the "Note") dated of even date herewith in the original principal
amount of $5,000,000.00, executed by the Debtor and payable to the
order of the Secured Party;
b) Any and all advances made under this Agreement by the
Secured Party on behalf of the Debtor; and
c) All renewals, rearrangements, or extensions of all or
any part of the foregoing.
Section 4.03. Proceeds of Collateral. The Debtor will report fully
and faithfully to the Secured Party regarding the collateral and all proceeds
of the Collateral and, upon request by the Secured Party, will pay or turn over
promptly (in the form received by the Debtor, whether cash, negotiable
instruments, drafts, assigned accounts, chattel paper, or otherwise) all
proceeds from any disposition of the Collateral, to be applied to the
Indebtedness, subject to final payment or collection if other than cash.
Application of such proceeds to the Indebtedness will be in the sole discretion
of the Secured Party, provided such application of proceeds is made by the
Secured Party in a reasonable manner.
Section 4.04. Secured Party's Expenses. To the extent not prohibited
by law, the Debtor will pay, or reimburse the Secured Party for, all costs and
expenses, of every character, incurred or expended from time to time
(including, but not limited to, the fees and expenses of counsel for the
Secured Party), in connection with the negotiation, preparation, execution,
filing, recording, refiling and re-recording of this Agreement and all related
financing statements and the making, servicing and collection of the debt
secured hereby; any and all stamp, mortgage and recording taxes; the costs of
any title insurance or lien insurance purchased by the Secured Party to
connection herewith; all costs of negotiation, preparation, execution and
delivery of any and all amendments, modifications, supplements, consents,
waivers or other documents or writings relating to the transactions
contemplated by this Agreement; and all costs (including attorneys fees) of
reviewing the title opinions and security opinions relating to the debt secured
hereby. The Debtor will reimburse the Secured Party
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for all amounts expended by the Secured Party to satisfy any obligation of the
Debtor under this Agreement or to protect the Collateral. In addition, whether
or not a default shall have occurred, the Debtor will pay, or reimburse the
Secured Party for, all costs and expenses, of every character incurred or
expended from time to time in connection with the evaluation, monitoring,
administration and protection of the Collateral, the exercise by the Secured
Party of any of its rights and remedies hereunder or at law, including, but not
limited to, all appraisal fees, consulting fees, brokerage fees and
commissions, insurance premiums, Uniform Commercial Code search fees, fees
incident to title searches and reports, investigation costs, escrow fees,
attorneys' fees, legal expenses, fees of auditors and accountants, court costs,
fees of governmental authorities, auctioneer fees and expenses, and all fees
and expenses incurred in connection with the marshalling, guarding, management,
operation, removal, maintenance, cleanup, storage, auction and liquidation of
the Collateral. Any amount to be paid or reimbursed by the Debtor to the
Secured Party shall be a demand obligation owing by the Debtor to the Secured
Party and, to the extent not prohibited by law, shall bear interest from the
date of expenditure by the Secured Party until paid at the same rate provided
for past-due principal and interest in the Note.
PART V. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS
Section 5.01. Assumed Names. The Debtor represents and warrants to
the Secured Party that it now owns and has always owned all its property in,
and now operates and has always operated solely under, the name "Lancer
Corporation" and no other name.
Section 5.02. No Other Lien or Claims. The Debtor represents and
warrants to the Secured Party that no financing statement, collateral transfer
or assignment, or any other instrument of encumbrance covering all or any part
of the Collateral or its proceeds is on file in any public office, and there
exists no adverse claims, defense, default, lien, security interest, or
encumbrance with respect to the Collateral.
Section 5.03. Debtor's Office. The Debtor represents and warrants to
the Secured Party that it maintains its chief
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executive office at 000 X. Xxxxx, Xxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx 00000. The
Debtor will promptly notify the Secured Party in writing of any addition to,
change in, or discontinuance of the location of such chief executive office.
Section 5.04. Location of Collateral. All the Collateral will be
kept, at the Debtor's risk of loss, at the address shown in Section 5.03 herein
or at such other locations as have been previously disclosed to the Secured
Party. The Secured Party may inspect the Collateral at any time. Except as
may be required in the ordinary course of the Debtor's business, the Collateral
will not be removed from such location unless the Debtor notifies the Secured
Party in writing and the Secured Party consents in writing in advance of its
removal to another location.
Section 5.05. Use of Collateral. Until default, the Debtor may use
the Collateral in any lawful manner not inconsistent with this Agreement or
with the terms or conditions of any policy of insurance thereon. The Secured
Party's security interest will attach to all proceeds of sales and other
dispositions of the Collateral. The Debtor will not sell, lend, rent, lease,
or otherwise dispose of the Collateral or any interest therein except as
authorized in this Agreement or in writing in advance by the Secured Party or
as may be required in the ordinary course of the Debtor's business.
Section 5.06. Taxes, Liens, Etcetera. The Debtor will pay prior to
delinquency all taxes, charges, liens, and assessments against all or any of
the Collateral, except for those which the Debtor is diligently contesting in
good faith. Should the Debtor fail to do so, the Secured Party at its option
may pay any of them and will be the sole judge of the legality or validity
thereof and the amount necessary to discharge the same. Such payment will
become part of the Indebtedness and will be paid to the Secured Party by the
Debtor immediately and without demand, with interest thereon, at the Past Due
Rate, from the date incurred by the Secured Party until the date reimbursed.
The Debtor will defend the Collateral and its proceeds against the claims and
demands of all persons.
Section 5.07. Insurance. The Debtor will maintain insurance at all
times with respect to all Collateral against risk of fire,
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risk of theft, and such other risks as the Secured Party may require, including
extended coverage. Such insurance policies will contain a standard mortgagee's
endorsement providing for payment to the Secured Party of any loss of or damage
to the Collateral. All policies of insurance will provide that the insurer
will give the Secured Party written notice of cancellation at least thirty days
before cancelling such insurance or before such insurance expires. The Debtor
will furnish the Secured Party evidence of compliance with the foregoing
insurance provisions at any time the Secured Party may request it. The Secured
Party may act as attorney-in-fact for the Debtor in obtaining, adjusting,
settling, and cancelling such insurance and in endorsing any draft drawn by
insurers of the Collateral. The Secured Party may apply any proceeds of such
insurance that it may receive in payment on account of the Indebtedness,
whether due or not.
Section 5.08. Protection of Security Interest. At its own expense,
the Debtor will do, make, procure, execute, and deliver all acts, things,
writings, and assurances as the Secured Party may at any time request to
protect, assure, or enforce the Secured Party's interests, rights, and remedies
created by, provided in, or emanating from this Agreement. The Debtor will
sign and execute (alone or with the Secured Party) any financing statement or
other writing, will procure any document, and will pay all connected costs
necessary to protect the security interest under this Agreement against the
rights or interests of third persons.
Section 5.09. Separation of Proceeds. The Debtor will at all times
keep the proceeds of the Collateral separate and distinct from other property
of the Debtor and will keep accurate and complete records of the Collateral and
its proceeds.
Section 5.10. Title to Collateral. The Debtor represents and
warrants to the Secured Party (1) that the Debtor is the legal and beneficial
owner of, has good and marketable title to, the Collateral and (2) that the
Debtor has the right to transfer all interest therein.
Section 5.11. Security Agreement As Financing Statement. The Secured
Party may file this Agreement with the Texas Secretary of State or any other
public official or in any public record. A carbon, photographic, or other
reproduction of this Agreement or
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of any financing statement covering all or any part of the Collateral will be
sufficient as a financing statement.
Section 5.12. Waiver of Notice. Except as otherwise provided in this
Agreement or by law, the Debtor hereby waives demand, protest, notice of intent
to accelerate, notice of acceleration, notice of any action taken by the
Secured Party in connection with the Indebtedness, and all other notices.
Section 5.13. Action Affecting Indebtedness or Collateral. No
renewal, extension (whether an extension of the time of payment or otherwise),
rearrangement, or modification of all or any of the Indebtedness, no release of
the Debtor as to all or any of the Indebtedness, and no delay or omission in
exercising any right or power with respect to all or any of the Indebtedness or
with respect hereto will in any manner impair or affect the Secured Party's
rights hereunder. The Debtor hereby consents to (1) any indulgence of the
Secured Party, (2) any substitution for, exchange of, or release of the
Collateral, in whole or in part, and (3) the addition or release of any person
liable on the Indebtedness or the Collateral.
PART VI. EVENTS OF DEFAULT
Section 6.01. Events of Default. The occurrence of any Event of
Default under the Loan Agreement shall constitute an Event of Default under
this Agreement.
PART VII. SECURED PARTY'S RIGHTS AND REMEDIES
REGARDLESS OF DEFAULT
Section 7.01. Assignment of Secured Party's Rights. The Secured
Party may from time to time assign this Agreement, the Secured Party's rights
hereunder, or all or any part of the Indebtedness. In any such case, the
assignee will be entitled to all rights, privileges, and remedies granted to
the Secured Party by this Agreement, and the Debtor will not assert against the
assignee any claim or defense it may have against the Secured Party, except
those granted in this Agreement.
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Section 7.02. Inspection of Collateral. The Secured Party may enter
upon the Debtor's premises at any reasonable time to inspect the Collateral and
the Debtor's books and records pertaining to the Collateral, and the Debtor
will assist the Secured Party in making any such inspection.
Section 7.03. Protection and Preservation of Collateral. At its
option, the Secured Party (1) may discharge taxes, liens, security interests,
or other encumbrances at any time levied or placed on the Collateral; (2) may
pay for the insurance on the Collateral; and (3) may pay for the maintenance
and preservation of the Collateral. The Debtor will reimburse the Secured
Party on demand for any payment made or expense incurred by the Secured Party
pursuant to the foregoing authorization, plus interest thereon at the Past Due
Rate.
Section 7.04. Call for Additional Collateral. If the Secured Party
should at any time be of the opinion that the Collateral is not sufficient
security for the Indebtedness or that the Collateral has declined or may
decline in value, or should the Secured Party in good faith believe that the
prospect of payment or performance of the Debtor's obligations to the Secured
Party is impaired, then the Secured Party may call for additional collateral
satisfactory to Secured Party and the Debtor will furnish such additional
security forthwith. The call for additional security must be in writing and
sent via the United States Postal Service, certified mail, return receipt
requested, addressed to the Debtor's address recited in Section 5.03 hereof. If
the Secured Party makes such call for additional collateral and the Debtor
fails to furnish such additional security within fifteen (15) days after such
call is sent, then the Secured Party may declare the Debtor to be in default
under this Agreement.
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21
PART VIII. SECURED PARTY'S RIGHTS AND REMEDIES
IN EVENT OF DEFAULT
Section 8.01. Acceleration, Repossession, and Sale. On the
occurrence of an Event of Default or at any time thereafter, the Secured Party
may declare all or any part of the Indebtedness to be immediately due and
payable and will have the rights and remedies of a secured party under the
Texas Business and Commerce Code, including (but not necessarily limited to)
the right to take possession of and sell, lease, or otherwise dispose of any or
all of the Collateral in a commercially reasonable manner. For that purpose the
Secured Party may enter upon any premises where the Collateral or any part
thereof may be situated and may remove the Collateral therefrom.
Section 8.02. Assembly of Collateral. The Secured Party may require
the Debtor to assemble the Collateral and make it available to the Secured
Party at a place to be designated by the Secured Party that is reasonably
convenient to both parties.
Section 8.03. Notice of Sale. On the occurrence of an Event of
Default or at any time thereafter, the Secured Party may, in its discretion,
sell for cash and assign and deliver all or any part of the Collateral then
covered by this Agreement in a commercially reasonable manner at public or
private sale without notice or advertisement other than as required by the
Texas Business and Commerce Code or may cause all or a part of the Collateral
to be sold at judicial sale after judgment in any court of competent
jurisdiction. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Secured Party will send the Debtor reasonable notice of (1) the time and place
of any public sale thereof or (2) the time after which any private sale or
other disposition thereof is to be made. The requirement of sending reasonable
notice will be met if such notice is mailed, postage prepaid, to the Debtor at
the address stated in Section 5.03 hereof at least ten calendar days before the
time of the sale or disposition.
Section 8.04. Expenses of Repossession or Sale. Expenses of
retaking, holding, preparing for sale, selling, or the like will include the
Secured Party's reasonable attorney's fees and legal
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22
expenses. On demand the Debtor will pay such expenses, plus interest thereon
at the Past Due Rate. The Debtor will remain liable for any deficiency
remaining on the Indebtedness after disposition of the Collateral.
Section 8.05. Power of Attorney. In protecting, exercising or
assuring its interests, rights and remedies under this Agreement, the Secured
Party may execute, sign, endorse, transfer, or deliver, on behalf of and in the
Debtor's name, as the Debtor's attorney-in-fact, all notes, checks, drafts, or
other instruments for the payment of money and all receipts, certificates of
origin, applications for certificates of title, or any other documents
necessary to evidence, perfect, or realize upon any of the Collateral or
proceeds thereof. This Power of Attorney is in addition to the authority
granted by the Debtor to the Secured Party in Section 5.08 hereof and shall be
deemed to be coupled with an interest and shall be irrevocable.
Section 8.06. Compromise and Settlement. On the occurrence of an
Event of Default or at any time thereafter, the Secured Party may demand, xxx
for, collect, or make any compromise or settlement with reference to the
Collateral as the Secured Party chooses in its sole discretion.
PART IX. ADDITIONAL AGREEMENTS
Section 9.01. Gender and Number. In this Agreement the masculine
will be construed as feminine or neuter, and the singular as plural, as the
occasion may require.
Section 9.02. Parties Bound. "Secured Party" and "Debtor," as used
in this Agreement, include any successor, representative, receiver, trustee,
custodian, or assign of any of such parties.
Section 9.03. Captions. The part and section captions appearing in
this Agreement are for convenience only and will not be given any substantive
meaning or significance whatever in construing the terms and provisions of this
Agreement.
Section 9.04. Other Defined Terms. Any term that is used in this
Agreement that is defined in Chapters 1-9 of the Texas
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23
Business and Commerce Code (the Texas enactment of the Uniform Commercial Code)
is used with the meaning as defined in such chapters.
Section 9.05. Governing Law. This Agreement will be governed by the
law of the State of Texas in force as of the effective date of this Agreement.
Section 9.06. Cumulation of Remedies. The Secured Party's remedies
under this Agreement are cumulative. The exercise of any one or more of the
remedies provided in this Agreement will not be construed as waiving any other
remedy of the Secured Party. The Secured Party may exercise any two or more
remedies (whether existing under this Agreement, by law, or otherwise)
simultaneously or sequentially.
Section 9.07. Severability. If any one or more of the provisions
contained in this Agreement is for any reason held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
will not affect any other provision of this Agreement.
Section 9.08. Counterpart Copies. This Agreement may be executed in
multiple counterparts, each of which will be deemed an original and all of
which, taken together, will constitute but one agreement. It will not be
necessary that any single counterpart hereof be executed by all parties hereto
so long as the Debtor and the Secured Party have each executed a counterpart
hereof.
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24
EXECUTED effective on the date first mentioned above.
LANCER CORPORATION, a Texas corporation
By: /s/ XXXX X. XXXXXXX
__________________________________
Name: Xxxx X. Xxxxxxx
________________________________
Title: Vice President of Finance
_______________________________
"Debtor"
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ XXXXXXX X. XXXXXX
__________________________________
Name: Xxxxxxx X. Xxxxxx
________________________________
Title: Senior Vice President
"Secured Party"
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25
GUARANTY AGREEMENT
For and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00)
and other good and valuable consideration in hand paid to the undersigned,
LANCER INTERNATIONAL SALES, INC., A TEXAS CORPORATION (the "Guarantor"), the
receipt and sufficiency of which considerations are hereby acknowledged, and
for the purpose of enabling LANCER CORPORATION, A TEXAS CORPORATION (the
"Debtor"), to obtain credit or other financial accommodations from FIRST
INTERSTATE BANK OF TEXAS, N.A., A NATIONAL BANKING ASSOCIATION, in San Antonio,
Bexar County, Texas (the "Lender"), and the benefits thereby received by the
Guarantor, the Guarantor hereby jointly and severally (with all other
guarantors, if any, and the Debtor) and unconditionally guarantees the prompt
payment when due of the Obligations as defined below.
The Obligations consist of:
1. The indebtedness represented by that certain
promissory note of the Debtor (the "Note") dated of even date
herewith, in the principal amount of $5,000,000.00, payable to the
order of the Lender, bearing interest and being payable as therein
provided, which Note is more fully described in a Security Agreement
of even date therewith, executed by the Debtor for the benefit of the
Lender;
2. All renewals, extensions and rearrangements of the
Note;
3. All interest and costs of collection owing and that
may become owing thereon or in connection therewith;
4. All indebtedness and liabilities of the Debtor to the
Lender now existing or hereafter arising, whether fixed or contingent,
liquidated or unliquidated, direct or indirect, and whether created
under or evidenced by note, application, commitment, endorsement,
agreement, overdraft of depository account, or otherwise; and
5. The Lender's court costs and reasonable attorney's
fees if the foregoing are not paid by the Guarantor on demand when due
or if this Guaranty Agreement is enforced by suit or through probate,
bankruptcy, or other judicial proceedings.
26
All amounts becoming payable hereunder to the Lender under this
Guaranty Agreement shall be payable at the Lender's principal office
in San Antonio, Bexar County, Texas.
The Guarantor hereby waives (a) any notice of acceptance of this
guaranty by the Lender; (b) any notice of the creation, advancement, increase,
existence, extension, renewal, or rearrangement of the Obligations or any part
thereof; (c) any indulgence with respect to the Obligations (or any part
thereof) and with respect to any nonpayment thereof; (d) grace, demand,
protest, presentment, notice of demand, notice of intent to accelerate, notice
of acceleration, notice of protest, or notice of presentment, and all other
notices, whether similar or dissimilar, with respect to the Obligations; and
(e) notice of the amount of the Obligations outstanding at any time. The
Lender at its option may, at any time and without notice to or further consent
by the Guarantor, accelerate, extend, or renew the maturity of the Obligations
or any part thereof and may grant any other indulgence with respect thereto.
Neither the Lender's rights nor the Guarantor's obligations and liabilities
will be affected or impaired in any manner by (i) any renewal, extension, or
rearrangement of (or any other indulgence with respect to) the Obligations or
any part thereof; (ii) any release, withdrawal or subordination of, or
substitution for, any security or other guaranty now or hereafter held by the
Lender for payment of the Obligations or any part thereof; (iii) any release of
the Debtor or any other person primarily or secondarily liable on the
Obligations or any part thereof (including any maker, endorser, guarantor, or
surety); (iv) any delay in enforcing payment of the Obligations or any part
thereof; or (v) any delay, omission, lack of diligence, or lack of care in
exercising any right or power with respect to the Obligations or any security
therefor or guaranty thereof. Lender shall not be required as a condition of
enforcing the Guarantor's liabilities and obligations hereunder requiring
payment by the Guarantor hereunder to: (a) obtain or assert a claim for
judgment against the Debtor for the Obligations or any part thereof; (b)
collect or attempt to collect all or any part of the Obligations from the
Debtor or any other person or from any other source; (c) foreclose against or
seek to realize upon any security now or hereafter existing for the Obligations
or any part thereof; (d) assert any other right or remedy to which the Lender
is or may be entitled in connection with the
2
27
Obligations (or any part thereof) or any security therefor or other guaranty
thereof; or (e) assert or file any claim against the assets or estate of the
Debtor or other person liable for the Obligations or any part thereof.
The Guarantor expressly waives any right to the benefit of (or to
require or control application of) any security or the proceeds thereof now
existing or hereafter obtained by the Lender as security for the Obligations or
any part thereof. The Lender need not apply to any of the Obligations any
monies, payments, or other property at any time received by, paid to, or in the
possession of the Lender, except as the Lender determines in its sole
discretion.
The Guarantor will be and remain fully liable under this Guaranty
Agreement, as provided herein, even if the Debtor may not be liable for any
part of the Obligations (a) because the Debtor's indebtedness now or at any
time hereafter exceeds the amount or type permitted by law; (b) because such
Obligation was ultra xxxxx; (c) because any person creating or guaranteeing the
same acted without authority; or (d) because of the Debtor's lack of capacity,
bankruptcy, insolvency or dissolution such as to render the Obligations void,
unenforceable or uncollectible as against the Debtor. Nothing herein, however,
shall be deemed to admit or deny the existence of any right of the Guarantor to
any offset, reduction or abatement of Guarantor's Obligations hereunder by
reason of any claim, right or cause of action (or any realization thereon), if
any, of Guarantor or the Debtor against the Lender for any reason.
Any notice or demand to the Guarantor hereunder or in connection
herewith must be in writing and may be given (and will conclusively be deemed
and considered to have been given and received) by the deposit of such notice
in the United States mails, postage prepaid and addressed to the Guarantor at
its address shown herein. Nonetheless, actual notice will always be effective,
no matter how given or received. The last preceding sentence will never be
construed to affect or impair any waiver of notice or demand herein provided or
to require the giving of notice or demand to or upon the Guarantor in any
situation or for any reason. Nothing herein may be construed to cancel, amend,
3
28
discharge, or limit any other guaranty or similar undertaking by or obligation
of the Guarantor in favor of the Lender.
This Guaranty is a continuing guaranty. It will continue to be
effective (or shall be reinstated, as the case may be) without notice or
further act if, at any time, any payment of any of the Obligations is rescinded
or must otherwise be returned by the Lender upon or in connection with the
insolvency, bankruptcy or reorganization of the Debtor, any other Guarantor or
otherwise, all as though such payment had never been made to the Lender.
Without impairing the Lender's right to demand and collect the balance of the
Obligations from the Guarantor, the Lender may compound with any one or more
guarantors for such amount as it may see fit and may release any guarantor from
all further liability to the Lender for such Obligations. Such compounding and
release will not in any manner impair the rights of each guarantor as against
any other guarantor or the rights of Lender against any other guarantor.
The Guarantor hereby agrees that any and all indebtedness now or
hereafter owed or owing by the Debtor to the Guarantor shall be and remain
subordinate in payment to all of the Obligations. Should the Guarantor receive
any payment on account of any of said subordinated indebtedness (or by reason
of any security therefor), the Guarantor shall hold the amount received in
trust for the benefit of the Lender and, upon Lender's demand, shall remit same
to Lender for application on the Obligations. No Guarantor will exercise any
right it may acquire by way of subrogation under this Guaranty, by payment made
hereunder or otherwise, until all of the Obligations have been paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when any Obligations remain outstanding, such amount shall be held
in trust for the benefit of the Lender and shall forthwith be paid to the
Lender to be credited and applied upon the Obligations, whether same or any
portion thereof are then due. The Guarantor hereby waives all rights to which
the Guarantor may be (or might otherwise become) entitled pursuant to Sections
34.02 and 34.03 of the Texas Business and Commerce Code as in effect from time
to time, except the Guarantor shall be entitled to any applicable right of
subrogation after the full and final payment of the Obligations.
4
29
This Guaranty Agreement will be transferable and negotiable by the
Lender, with the same force and effect and to the same extent that the
Obligations are transferable. On the Lender's assignment or transfer of any of
the Obligations hereby guaranteed, the legal holder or owner of the Obligations
(or part thereof or interest therein thus transferred or assigned by the
Lender) will also, unless provided otherwise by the Lender in its assignment,
have and may exercise all rights granted to the Lender under this Guaranty
Agreement to the extent of the part of or interest in the Obligations thus
assigned or transferred to said person. The Guarantor hereby expressly waives
notice of transfer or assignment of the Obligations (or any part thereof) or
the rights of the Lender hereunder. Anything in this paragraph to the contrary
notwithstanding, all Obligations to the Lender will be paid in full first,
before any assignee receives any benefits of this Guaranty agreement.
This Guaranty Agreement is governed by the law of the State of Texas,
except as Federal law may apply. The Guarantor agrees and consents to the
jurisdiction of the County and District Courts of Bexar County, Texas and of
the United States District Court for the Western District of Texas (San Antonio
Division), and acknowledges that such courts shall constitute proper and
convenient forums with respect to the subject matter hereof, and further agree
that such courts shall be the sole and exclusive forums for the regulation of
any actions between the Guarantor and the Lender with respect to the subject
matter hereof.
This Guaranty Agreement and the Guarantor's obligations hereunder will
be binding on the Guarantor and the Guarantor's heirs, legal representatives,
personal representative, executors, administrators and successors.
As used in this Guaranty Agreement and as required by the context,
each number (singular and plural) includes all numbers, each gender includes
all genders and, unless the context requires otherwise, the words "person" and
"party" include "person," "corporation," "firm," "partnership," "limited
partnership," "joint venture," "association" or other entity.
The parties agree to be bound by the terms and provisions of the
current Arbitration Program of First Interstate Bank of Texas,
5
30
N.A., which is incorporated by reference herein and is acknowledged as
received by the parties, pursuant to which any and all disputes shall be
resolved by mandatory binding arbitration upon the request of either party.
EXECUTED this 29th day of December, 1995.
LANCER INTERNATIONAL SALES,
INC., a Texas corporation
By: /s/ XXXX X. XXXXXXX
__________________________________
Name: Xxxx X. Xxxxxxx
________________________________
Title: Vice President
_______________________________
Address:
235 W. Turbo
______________________________
Xxx Xxxxxxx, XX 00000
______________________________
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31
GUARANTY AGREEMENT
For and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00)
and other good and valuable consideration in hand paid to the undersigned,
LANCER INTERNATIONAL SALES, INC., A TEXAS CORPORATION (the "Guarantor"), the
receipt and sufficiency of which considerations are hereby acknowledged, and
for the purpose of enabling LANCER CORPORATION, A TEXAS CORPORATION (the
"Debtor"), to obtain credit or other financial accommodations from FIRST
INTERSTATE BANK OF TEXAS, N.A., A NATIONAL BANKING ASSOCIATION, in San Antonio,
Bexar County, Texas (the "Lender"), and the benefits thereby received by the
Guarantor, the Guarantor hereby jointly and severally (with all other
guarantors, if any, and the Debtor) and unconditionally guarantees the prompt
payment when due of the Obligations as defined below.
The Obligations consist of:
1. The indebtedness represented by that certain
promissory note of the Debtor (the "Note") dated of even date
herewith, in the principal amount of $5,000,000.00, payable to the
order of the Lender, bearing interest and being payable as therein
provided, which Note is more fully described in a Security Agreement
of even date therewith, executed by the Debtor for the benefit of the
Lender;
2. All renewals, extensions and rearrangements of the
Note;
3. All interest and costs of collection owing and that
may become owing thereon or in connection therewith;
4. All indebtedness and liabilities of the Debtor to the
Lender now existing or hereafter arising, whether fixed or contingent,
liquidated or unliquidated, direct or indirect, and whether created
under or evidenced by note, application, commitment, endorsement,
agreement, overdraft of depository account, or otherwise; and
5. The Lender's court costs and reasonable attorney's
fees if the foregoing are not paid by the Guarantor on demand when due
or if this Guaranty Agreement is enforced by suit or through probate,
bankruptcy, or other judicial proceedings.
32
All amounts becoming payable hereunder to the Lender under this
Guaranty Agreement shall be payable at the Lender's principal office
in San Antonio, Bexar County, Texas.
The Guarantor hereby waives (a) any notice of acceptance of this
guaranty by the Lender; (b) any notice of the creation, advancement, increase,
existence, extension, renewal, or rearrangement of the Obligations or any part
thereof; (c) any indulgence with respect to the Obligations (or any part
thereof) and with respect to any nonpayment thereof; (d) grace, demand,
protest, presentment, notice of demand, notice of intent to accelerate, notice
of acceleration, notice of protest, or notice of presentment, and all other
notices, whether similar or dissimilar, with respect to the Obligations; and
(e) notice of the amount of the Obligations outstanding at any time. The
Lender at its option may, at any time and without notice to or further consent
by the Guarantor, accelerate, extend, or renew the maturity of the Obligations
or any part thereof and may grant any other indulgence with respect thereto.
Neither the Lender's rights nor the Guarantor's obligations and liabilities
will be affected or impaired in any manner by (i) any renewal, extension, or
rearrangement of (or any other indulgence with respect to) the Obligations or
any part thereof; (ii) any release, withdrawal or subordination of, or
substitution for, any security or other guaranty now or hereafter held by the
Lender for payment of the Obligations or any part thereof; (iii) any release of
the Debtor or any other person primarily or secondarily liable on the
Obligations or any part thereof (including any maker, endorser, guarantor, or
surety); (iv) any delay in enforcing payment of the Obligations or any part
thereof; or (v) any delay, omission, lack of diligence, or lack of care in
exercising any right or power with respect to the Obligations or any security
therefor or guaranty thereof. Lender shall not be required as a condition of
enforcing the Guarantor's liabilities and obligations hereunder requiring
payment by the Guarantor hereunder to: (a) obtain or assert a claim for
judgment against the Debtor for the Obligations or any part thereof; (b)
collect or attempt to collect all or any part of the Obligations from the
Debtor or any other person or from any other source; (c) foreclose against or
seek to realize upon any security now or hereafter existing for the Obligations
or any part thereof; (d) assert any other right or remedy to which the Lender
is or may be entitled in connection with the
2
33
Obligations (or any part thereof) or any security therefor or other guaranty
thereof; or (e) assert or file any claim against the assets or estate of the
Debtor or other person liable for the Obligations or any part thereof.
The Guarantor expressly waives any right to the benefit of (or to
require or control application of) any security or the proceeds thereof now
existing or hereafter obtained by the Lender as security for the Obligations or
any part thereof. The Lender need not apply to any of the Obligations any
monies, payments, or other property at any time received by, paid to, or in the
possession of the Lender, except as the Lender determines in its sole
discretion.
The Guarantor will be and remain fully liable under this Guaranty
Agreement, as provided herein, even if the Debtor may not be liable for any
part of the Obligations (a) because the Debtor's indebtedness now or at any
time hereafter exceeds the amount or type permitted by law; (b) because such
Obligation was ultra xxxxx; (c) because any person creating or guaranteeing the
same acted without authority; or (d) because of the Debtor's lack of capacity,
bankruptcy, insolvency or dissolution such as to render the Obligations void,
unenforceable or uncollectible as against the Debtor. Nothing herein, however,
shall be deemed to admit or deny the existence of any right of the Guarantor to
any offset, reduction or abatement of Guarantor's Obligations hereunder by
reason of any claim, right or cause of action (or any realization thereon), if
any, of Guarantor or the Debtor against the Lender for any reason.
Any notice or demand to the Guarantor hereunder or in connection
herewith must be in writing and may be given (and will conclusively be deemed
and considered to have been given and received) by the deposit of such notice
in the United States mails, postage prepaid and addressed to the Guarantor at
its address shown herein. Nonetheless, actual notice will always be effective,
no matter how given or received. The last preceding sentence will never be
construed to affect or impair any waiver of notice or demand herein provided or
to require the giving of notice or demand to or upon the Guarantor in any
situation or for any reason. Nothing herein may be construed to cancel, amend,
3
34
discharge, or limit any other guaranty or similar undertaking by or obligation
of the Guarantor in favor of the Lender.
This Guaranty is a continuing guaranty. It will continue to be
effective (or shall be reinstated, as the case may be) without notice or
further act if, at any time, any payment of any of the Obligations is rescinded
or must otherwise be returned by the Lender upon or in connection with the
insolvency, bankruptcy or reorganization of the Debtor, any other Guarantor or
otherwise, all as though such payment had never been made to the Lender.
Without impairing the Lender's right to demand and collect the balance of the
Obligations from the Guarantor, the Lender may compound with any one or more
guarantors for such amount as it may see fit and may release any guarantor from
all further liability to the Lender for such Obligations. Such compounding and
release will not in any manner impair the rights of each guarantor as against
any other guarantor or the rights of Lender against any other guarantor.
The Guarantor hereby agrees that any and all indebtedness now or
hereafter owed or owing by the Debtor to the Guarantor shall be and remain
subordinate in payment to all of the Obligations. Should the Guarantor receive
any payment on account of any of said subordinated indebtedness (or by reason
of any security therefor), the Guarantor shall hold the amount received in
trust for the benefit of the Lender and, upon Lender's demand, shall remit same
to Lender for application on the Obligations. No Guarantor will exercise any
right it may acquire by way of subrogation under this Guaranty, by payment made
hereunder or otherwise, until all of the Obligations have been paid in full. If
any amount shall be paid to the Guarantor on account of such subrogation rights
at any time when any Obligations remain outstanding, such amount shall be held
in trust for the benefit of the Lender and shall forthwith be paid to the
Lender to be credited and applied upon the Obligations, whether same or any
portion thereof are then due. The Guarantor hereby waives all rights to which
the Guarantor may be (or might otherwise become) entitled pursuant to Sections
34.02 and 34.03 of the Texas Business and Commerce Code as in effect from time
to time, except the Guarantor shall be entitled to any applicable right of
subrogation after the full and final payment of the Obligations.
4
35
This Guaranty Agreement will be transferable and negotiable by the
Lender, with the same force and effect and to the same extent that the
Obligations are transferable. On the Lender's assignment or transfer of any of
the Obligations hereby guaranteed, the legal holder or owner of the Obligations
(or part thereof or interest therein thus transferred or assigned by the
Lender) will also, unless provided otherwise by the Lender in its assignment,
have and may exercise all rights granted to the Lender under this Guaranty
Agreement to the extent of the part of or interest in the Obligations thus
assigned or transferred to said person. The Guarantor hereby expressly waives
notice of transfer or assignment of the Obligations (or any part thereof) or
the rights of the Lender hereunder. Anything in this paragraph to the contrary
notwithstanding, all Obligations to the Lender will be paid in full first,
before any assignee receives any benefits of this Guaranty agreement.
This Guaranty Agreement is governed by the law of the State of Texas,
except as Federal law may apply. The Guarantor agrees and consents to the
jurisdiction of the County and District Courts of Bexar County, Texas and of
the United States District Court for the Western District of Texas (San Antonio
Division), and acknowledges that such courts shall constitute proper and
convenient forums with respect to the subject matter hereof, and further agree
that such courts shall be the sole and exclusive forums for the regulation of
any actions between the Guarantor and the Lender with respect to the subject
matter hereof.
This Guaranty Agreement and the Guarantor's obligations hereunder will
be binding on the Guarantor and the Guarantor's heirs, legal representatives,
personal representative, executors, administrators and successors.
As used in this Guaranty Agreement and as required by the context,
each number (singular and plural) includes all numbers, each gender includes
all genders and, unless the context requires otherwise, the words "person" and
"party" include "person," "corporation," "firm," "partnership," "limited
partnership," "joint venture," "association" or other entity.
The parties agree to be bound by the terms and provisions of the
current Arbitration Program of First Interstate Bank of Texas, N.A.,
5
36
which is incorporated by reference herein and is acknowledged as received by the
parties, pursuant to which any and all disputes shall be resolved by mandatory
binding arbitration upon the request of either party.
EXECUTED this _______ day of December, 1995.
LANCER LIMITED
By:
__________________________________
Name:
________________________________
Title:
_______________________________
Address:
______________________________
______________________________
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37
CERTIFICATE OF
RESOLUTIONS AND INCUMBENCY
I, Xxxx X. Xxxxxxx, Secretary of LANCER INTERNATIONAL SALES, INC., a
Texas corporation (the "Corporation"), hereby certify that:
1. The following resolutions were duly and unanimously adopted on
the 29th day of December, 1995, by the unanimous written consent of all of the
members of the Board of Directors of the Corporation, and none of such
resolutions have been amended, modified, or repealed in any respect, and all of
such resolutions are in full force and effect on the date hereof:
RESOLVED, that the Corporation guarantee a loan to LANCER
CORPORATION (the "Borrower") from FIRST INTERSTATE BANK OF TEXAS, N.A.
(the "Lender") in the face amount of $5,000,000.00, secured, in part,
by the Borrower's equipment;
RESOLVED, that the President or any Vice President of the
Corporation be, and he or she is hereby, authorized, empowered, and
directed to execute, acknowledge, and deliver for and on behalf and in
the name of the Corporation an eighth amendment to loan agreement and
such assignments, promissory notes, deeds of trust, financing
statements, security agreements, guaranties and instruments,
containing such terms and conditions as the President or any Vice
President of the Corporation may, in his or her sole discretion, deem
necessary or desirable, his or her approval thereof to be conclusively
presumed by his or her execution thereof, and that the attestation by
the Secretary of the Corporation and the affixation of the seal of the
Corporation shall not be necessary;
RESOLVED, that any and all transactions by any of the officers
or representatives of the Corporation, in its name and for its
account, with the Lender prior to the adoption of these resolutions
be, and they are hereby, ratified and approved for all purposes;
RESOLVED, that the officers of the Corporation be and they
hereby are authorized to take such steps, to
38
do such other acts and things, to execute such letters, certificates,
affidavits, agreements, papers and instruments as in their judgment
may be necessary or appropriate or desirable in order to consummate
the transactions referred to in the preceding resolutions;
RESOLVED, that the Board of Directors of the Corporation finds
that the transactions authorized by these resolutions shall directly
or indirectly benefit the Corporation; and
RESOLVED, that the foregoing powers and authority shall
continue in full force and effect until written notice of revocation
has been given the Lender and the Lender has acknowledged receipt
thereof.
2. The following named individuals are duly elected officers of
the Corporation holding the offices set forth opposite their respective names
as of the date hereof, the signatures set opposite the respective names and
titles of said officers are their true, authentic signatures, and the seal
affixed hereto is the authentic seal of the Corporation:
______________________________________________________________________________
NAME TITLE SIGNATURE
______________________________________________________________________________
Xxxxxx X. Xxxxxxxxx President /s/ Xxxxxx X. Xxxxxxxxx
_______________________
______________________________________________________________________________
Xxxx X. Xxxxxxx Vice President,
Secretary and
Treasurer /s/ Xxxx X. Xxxxxxx
_______________________
______________________________________________________________________________
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39
IN WITNESS WHEREOF, I have duly executed this Certificate this 4th
day of January, 1996.
(CORPORATE SEAL)
/s/ XXXX X. XXXXXXX
__________________________________
Xxxx X. Xxxxxxx, Secretary
I, Xxxxxx X. Xxxxxxxxx, President of the Corporation, do hereby
certify that Xxxx X. Xxxxxxx is the duly elected and acting Secretary of the
Corporation. I further certify that the signature as set forth above is his
correct signature.
IN WITNESS WHEREOF, I have duly executed this Certificate this 4th
day of January, 1996.
/s/ XXXXXX X. XXXXXXXX
__________________________________
Xxxxxx X. Xxxxxxxxx, President
THE STATE OF TEXAS )
)
COUNTY OF BEXAR )
This instrument was acknowledged before me on the 4th day of January,
1996, by Xxxx X. Xxxxxxx, Secretary of LANCER INTERNATIONAL SALES, INC. and
Xxxxxx X. Xxxxxxxxx, President of LANCER INTERNATIONAL SALES, INC., a Texas
corporation, on behalf of said corporation.
/s/ XXXXXXXXX X. XXXXXXX, III
_________________________________
Xxxxxxxxx X. Xxxxxxx, III
Notary Public, State of Texas
3
40
CERTIFICATE OF
RESOLUTIONS AND INCUMBENCY
I, Xxxx X. Xxxxxxx, Secretary of LANCER CORPORATION, A
TEXAS CORPORATION (the "Corporation"), hereby certify that:
1. The following resolutions were duly and unanimously adopted on
the 29th day of December, 1995, by the unanimous written consent of all of the
members of the Board of Directors of the Corporation, and none of such
resolutions have been amended, modified, or repealed in any respect, and all of
such resolutions are in full force and effect on the date hereof:
RESOLVED, that the Corporation borrow from from FIRST
INTERSTATE BANK OF TEXAS, N.A. (the "Lender") the sum of
$5,000,000.00, secured by a Security Agreement executed by the
Corporation, as debtor, for the benefit of the Lender, as secured
party;
RESOLVED, that Xxxx X. Xxxxxxx, Vice President Finance be, and
he is hereby, authorized, empowered, and directed to execute,
acknowledge, and deliver for and on behalf and in the name of the
Corporation an eighth amendment to loan agreement and loan documents
and such assignments, promissory notes, deeds of trust and
modifications of deeds of trust, financing statements, security
agreements, guaranties and instruments, containing such terms and
conditions as he may, in his sole discretion, deem necessary or
desirable, his approval thereof to be conclusively presumed by his
execution thereof, and that the attestation by the Secretary of the
Corporation and the affixation of the seal of the Corporation shall not
be necessary;
RESOLVED, that any and all transactions by any of the officers
or representatives of the Corporation, in its name and for its
account, with the Lender prior to the adoption of these resolutions
be, and they are hereby, ratified and approved for all purposes;
41
RESOLVED, that the officers of the Corporation be and they
hereby are authorized to take such steps, to do such other acts and
things, to execute such letters, certificates, affidavits, agreements,
papers and instruments as in their judgment may be necessary or
appropriate or desirable in order to consummate the transactions
referred to in the preceding resolutions;
RESOLVED, that the Board of Directors of the Corporation finds
that the transactions authorized by these resolutions shall directly
or indirectly benefit the Corporation; and
RESOLVED, that the foregoing powers and authority shall
continue in full force and effect until written notice of revocation
has been given the Lender and the Lender has acknowledged receipt
thereof.
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42
IN WITNESS WHEREOF, I have duly executed this Certificate this 29th
day of December, 1995.
(CORPORATE SEAL)
/s/ XXXX X. XXXXXXX
_________________________________
Xxxx X. Xxxxxxx, Secretary
THE STATE OF TEXAS )
)
COUNTY OF BEXAR )
This instrument was acknowledged before me on the 29thday of
December, 1995, by Xxxx X. Xxxxxxx, Secretary of LANCER CORPORATION and Xxxxxx
X. Xxxxxxxxx, President of LANCER CORPORATION, a Texas corporation, on behalf
of said corporation.
XXXXXXXXX X. XXXXXX, III
__________________________________
Notary Public, State of Texas
3
