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SIXTH AMENDMENT TO LOAN AGREEMENT
AND LOAN DOCUMENTS
This Sixth 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"), in a Fourth Amendment to Loan
Agreement and Loan Documents dated effective July 29, 1994 (the "Fourth
Amendment") and most recently in a Fifth Amendment to Loan Agreement and Loan
Documents dated effective November 8, 1994 (the "Fifth Amendment") the terms
and provisions of which First Amendment, Second Amendment, Third Amendment,
Fourth Amendment and Fifth 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 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, an existing Revolving Note in the
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;
WHEREAS, the Borrower has requested that the Lender renew and extend
the Revolving Note and increase the Revolving Note to $10,000,000.00, 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
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ii) a $2,000,000.00 term credit as evidenced by a promissory
note (the "Term Note") in the form attached hereto as Exhibit
"E", and (b) 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 and a modification agreement
(collectively) the "Lancermex Note") in substantially the form
attached hereto as Exhibit "F".
2. The following Section 1.2. of the Original Loan
Agreement is restated as follows:
1.2. Borrowing Base under the Revolving Note. Advances on
the Revolving Note will be limited to an amount equal to the
lesser of (a) the sum of (i) eighty percent (80%) of the
Borrower's Eligible Accounts and (ii) twenty percent (20%) of
the Borrower's Inventory, or (b) $10,000,000.00 (the
"Borrowing Base"); provided, however, for purposes of
calculating the Borrowing Base the amount drawn on the
Borrower's Inventory shall not exceed $4,000,000.00 and the
amount attributable to foreign Accounts shall not exceed
$2,500,000.00. As used in the prior sentence, the term
"Eligible Accounts" shall mean all Accounts, except for
Accounts owed by Subsidiaries or Affiliates of the Borrower,
contra Accounts, those which remain unpaid after ninety (90)
days from the date of invoice, those owed by any Account
Debtor if more than twenty-five percent (25%) of such Account
Debtor's Account remains unpaid after ninety (90) days from
the date of invoice, those owed by any Account Debtor other
than Coca-Cola to the extent such Account Debtor's Account
exceeds ten percent (10%) of all Accounts, those of the U.S.
government and its agencies which are subject to the
Assignment of Claims Act, those from any foreign Account
Debtor to the extent such foreign Account Debtor's Account
exceeds $1,200,000.00, and those from foreign Account Debtors
that are not Coca-Cola bottlers or entities in which Coca-Cola
has at least a twenty-five percent (25%) ownership stake,
excluding from this last exception only those foreign Account
Debtors whose Accounts are secured by letters of credit
acceptable to the Lender and those insured under the First
Interstate Foreign Assurance Export Program or other
comparable program approved in advance and in writing by the
Lender. Upon request by the Lender, and in any event within
forty-five (45) days after the end of each calendar month, the
Borrower shall furnish the Lender with a Borrowing Base
Certificate substantially in the form of EXHIBIT "B". The
Lender may determine and redetermine the Borrowing Base as
often as daily. Each determination of the Borrowing Base
shall be made by the Lender in its sole discretion and as a
matter of its own judgment.
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. The Current Ratio covenant in Section 4 of the Loan
Agreement is deleted and replaced with the following
Cash Flow Coverage Ratio:
4.7. Cash Flow Coverage Ratio. Maintain a Cash Flow Coverage
Ratio of not less than 1.50 to 1.0, where "Cash Flow Coverage
Ratio" means the ratio of (a) net income plus non-cash expense
less non-cash income plus interest expense to (b) scheduled
principal payments plus interest expense plus dividends. This
Cash Flow Coverage Ratio shall be tested quarter-annually and
calculated on the basis of the most recent four (4) quarterly
accounting periods.
5. The following affirmative covenant in Section 4 of
the Loan Agreement is restated as follows:
Section 4.11 Net Worth. Maintain Net Worth of not less than
$21,000,0000.00.
6. The following negative covenant in Section 5 of the
Loan Agreement is restated as follows:
Section 5.5 Redemption, Dividends and Distributions. At any
time (a) redeem, retire or otherwise acquire, directly or indirectly, any
shares of its capital stock; (b) except for cash
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dividends which do not cause a breach of any other covenant in
this Agreement, make any distribution of any Property to
stockholders as such; (c) substantially increase any salaries,
bonuses or other compensation to any officers, directors or
employees of the Borrower in excess of the current levels of
such compensation.
7. The borrower has executed certain deeds of trust more
particularly described in a Fourth Modification of Deeds of
Trust dated November 8, 1994. While the liens against the
real estate described in the Fourth Modification of Deeds of
Trust have previously secured all indebtedness of the Borrower
and Nueva Distribuidora Lancermex S.A. de C.V., the Lender has
agreed to release said liens insofar as they secure the
indebtedness represented by the Revolving Note described in
this Agreement. Upon request by the Borrower, the Lender
shall execute an appropriate instrument for recording in the
Real Property Records of Bexar County, Texas to evidence this
specific release of such liens as they pertain to the
Revolving Note only.
8. Except as specified in Section 7 hereof, the Loan
Documents secure, in addition to the Revolving Note,
the Term Note and the Lancermex Note described in
this Agreement.
9. Lancer International and Lancer Limited join in the
execution of this Agreement to evidence their consent
to, and agreement with, the terms hereof.
10. 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.
11. Except as specified in Section 7 hereof, 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.
12. 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.
13. 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.
14. 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.
EXECUTED in multiple counterparts effective as of July 6, 1995.
LANCER CORPORATION, A TEXAS
CORPORATION
By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President Finance
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LANCER INTERNATIONAL SALES, INC.,
A TEXAS CORPORATION
By: /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: President
LANCER LIMITED
By: /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Asst. Vice President
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EXHIBIT "A"
REVOLVING PROMISSORY NOTE
$10,000,000.00 June 30, 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. Mary's Street, Suite 300, San Antonio, Bexar County, Texas 78205, or such
other location as the Payee designates to the Makers in writing, the principal
sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), or the outstanding
principal amount advanced hereunder, whichever is less, in legal and lawful
money of the United States of America, with interest thereon as hereinafter
specified.
TERMS OF PAYMENT:
Interest only shall be due and payable in installments commencing on
July 15, 1995, and continuing regularly thereafter on the same day of each
calendar month until June 15, 1996 (the "Maturity Date"), when the entire
amount of this Note, principal and interest then remaining unpaid, shall be due
and payable.
The principal sum of this Note represents a revolving credit, all or
any part of which may be advanced to the Makers, repaid by the Makers and
re-advanced to the Makers, without the necessity for the execution of any other
instruments, at any time prior to the earlier of (i) the date on which demand
for payment is made hereunder or (ii) the Maturity Date; provided, however that
the unpaid principal balance of this Note shall never exceed the sum of
$10,000,000.00. All advances and all payments made on account of this Note
shall be recorded by the Payee, whose records shall be deemed correct absent
manifest error. In no event shall the provisions of Article 5069-15.01, et
seq., Vernon's Texas Civil Statutes, 1925, as amended (which regulates certain
revolving loan accounts and revolving tri-party accounts) apply to the loan
evidenced by this Note.
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.
RATE OF INTEREST:
From the date hereof until maturity, interest (calculated on the basis
of a year of 360 days for the actual number of days elapsed) shall accrue on
the unpaid principal balance of the Note at a rate (or rates) per annum equal
to (a) the Prime Rate; or (b) a fixed rate equal to the sum of (i) the average
of London Interbank Offered Rates (LIBOR) quoted for deposits with a maturity
corresponding to the pertinent Interest Period under the title "Money Rates" in
The Wall Street Journal issue published on (or closest to) the date of the rate
of interest on this Note is to be determined, plus (ii) two and one-half
percent (2.5%) ("Adjusted LIBOR"). Each determination of the Prime Rate and
Adjusted LIBOR made by the Payee in accordance with this Note shall be
conclusive except in the case of manifest error. After maturity (whether by
acceleration or otherwise) until paid, interest shall accrue on the matured
principal and accrued, but unpaid, interest on this Note at a rate per annum
equal to the Maximum Lawful Rate.
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Each advance requested under this Note (the "Advance Request") shall
include the following information:
1. the amount of the Advance Request;
2. the Makers' interest rate choice (Prime Rate or Adjusted
LIBOR) and, if the choice is Adjusted LIBOR, the Interest
Period (hereinafter defined); and
3. any other information required under the Loan Agreement
(hereinafter defined).
As used herein, the term "Interest Period" shall mean a one month, two
month or three month period chosen by the Makers and specified in each Advance
Request. Each Advance Request shall be made by telephone or in writing not
later than 12:00 Noon, local time, San Antonio, Texas, on the date the Makers
desire for funds to be advanced under this Note. In the event the Advance
Request is made by telephone, written confirmation of such Advance Request will
be sent to the Payee within five (5) business days following such Advance
Request.
If the Makers make no interest rate choice with any Advance Request,
the Makers shall be deemed to have made an Advance Request at the Prime Rate
until such time as a new Advance Request is made (or this Note matures). The
Makers and the Payee contemplate that different rate options may be in effect
simultaneously under this Note.
Any Advance Request for an Adjusted LIBOR rate of interest shall be
subject to the following special provisions:
(a) The Adjusted LIBOR rate of interest shall commence on the date
the requested funds are advanced and shall remain in effect
for the Interest Period specified in the pertinent Advance
Request, or until this Note matures, whichever is earlier;
(b) If any Interest Period would otherwise expire on a day which
is not a banking day in San Antonio, London and New York City
("Business Day"), such Interest Period shall expire on the
next succeeding Business Day;
(c) No Interest Period shall extend beyond the Maturity Date; and
(d) No more than eight Interest Periods shall be in existence
under this Note at any one time.
As used herein, the term "Prime Rate," shall mean that rate of
interest equal on any given day to the rate of interest most recently
established by the Payee as its prime rate and entered as such in its records,
whether or not such rate is otherwise published. The Prime Rate will
automatically fluctuate upward and downward, without special notice to the
Makers or any other person. THE PRIME RATE MAY NOT BE THE BEST OR LOWEST RATE
OR A FAVORED RATE OF INTEREST, AND ANY REPRESENTATION OR WARRANTY IN THAT
REGARD IS EXPRESSLY DISCLAIMED.
As used herein, the term "Maximum Lawful Rate" shall mean the greater
of (i) the highest non-usurious rate of interest permitted by applicable United
States law, or (ii) a rate per annum equal to the indicated rate ceiling
determined weekly in accordance with the computation specified in Article
5069-1.04, Vernon's Texas Civil Statutes, 1925, as amended, as such indicated
rate ceiling is in effect from time to time, but in no event greater than
twenty-eight percent (28%) per annum. Unless precluded by law, changes in the
Maximum Lawful Rate created by statute or governmental action during the term
of this Note shall be immediately applicable to this Note on the effective date
of such changes. In the event that no Maximum Lawful Rate exists, then the
term "Maximum Lawful Rate" shall be deemed to mean a rate per annum equal to
the Prime Rate, plus five percent (5.00%).
Notwithstanding the foregoing, if, at any time, the rate of interest
applicable to this Note (but for the limitation
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thereof to the Maximum Lawful Rate) exceeds the Maximum Lawful Rate, the rate
of interest to accrue on this Note shall be limited to the Maximum Lawful Rate,
but any subsequent reductions in such rate of interest applicable to this Note
(but for the limitation thereof to the Maximum Lawful Rate) shall not reduce
the rate of interest to accrue on this Note below the Maximum Lawful Rate until
the total amount of interest which would have accrued if a varying rate per
annum equal to the rate of interest applicable to this Note (but for the
limitation thereof to the Maximum Lawful Rate) had at all times been in effect.
PREPAYMENT:
Except for those portions of the Note bearing interest at Adjusted
LIBOR (which may not be voluntarily prepaid until the end of the pertinent
Interest Period), the Makers reserve 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.
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 dated July 24, 1991, executed by the Makers, as
debtors, for the benefit of the Payee, as secured party.
USE OF PROCEEDS:
This Note represents funds advanced and to be advanced to the Makers
at the Makers' special instance and request to finance working capital
requirements, the receipt of a portion of which is hereby acknowledged. This
Note is given pursuant to the terms of a Loan Agreement dated July 24, 1991, as
most recently amended by a Sixth Amendment to Loan Agreement and Loan Documents
dated of even date herewith between the Makers and the Payee.
REPRESENTATIONS AND WARRANTIES:
LANCER CORPORATION, a Texas 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.
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
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 PROGRAMS:
This Note and the Collateral Agreements shall be subject to the terms
and conditions of the Arbitration Program as described on Exhibit "A" attached
hereto and made a part hereof for all pertinent purposes.
LANCER CORPORATION, a Texas
corporation
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT "D"
ARBITRATION PROGRAM.
BINDING ARBITRATION. Upon the request of any party, whether made
before or after the institution of any legal proceeding, any action, dispute,
claim, or controversy of any kind (e.g., whether in contract or in tort,
statutory or common law, legal or equitable) now existing or hereafter arising
between the parties in any way arising out of, pertaining to or in connection
with (1) the agreement, document or instrument to which this Arbitration
Program is attached or in which it is referred to or any related agreements,
documents, or instruments (the "Documents"); (2) all past and present loans,
credits, accounts, deposit accounts (whether demand deposits or time deposits),
safe deposit boxes, safekeeping agreements, guarantees, letters of credit,
goods or services, or other transactions, contracts or agreements; (3) any
incidents, omissions, acts, practices, or occurrences causing injury to either
party whereby the other party or its agents, employees or representatives may
be liable, in whole or in part; or (4) any aspect of the past or present
relationships of the parties, shall be resolved by binding arbitration in
accordance with the terms of this Arbitration Program. The foregoing matters
shall be referred to as a "Dispute." Any party to this Arbitration Program
may, by summary proceedings (e.g., a plea in abatement or motion to stay
further proceedings), bring an action in court to compel arbitration of any
Disputes.
GOVERNING RULES. All Disputes between the parties shall be resolved
by binding arbitration administered by the American Arbitration Association
(the "AAA") in accordance with the terms of this Arbitration Program, the
Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable,
the Federal Arbitration Act (Title 9 of the United States Code). In the event
of any inconsistency between this Arbitration Program and such statute and
rules, this Arbitration Program shall control. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction;
provided, however, that nothing contained herein shall be deemed to be a waiver
by any party that is a bank of the protections afforded to it under 12 U.S.C.
Section 91 or Texas Banking Code art. 342-609.
NO WAIVER: PRESERVATION OF REMEDIES. No provision of, nor the
exercise of any rights under, this Arbitration Program shall limit the right of
any party to employ other remedies, including, without limitation (1)
foreclosing against any real or personal property collateral or other security
by the exercise of a power of sale under a deed of trust, mortgage, or other
security agreement or instrument, or applicable law; (2) exercising self-help
remedies (including set-off rights); or (3) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment, garnishment, or
the appointment of a receiver from a court having jurisdiction before, during,
or after the pendency of any arbitration. The institution and maintenance of
an action for judicial relief or pursuit of provisional or ancillary remedies
or exercise of self-help remedies shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the Dispute to arbitration nor
render inapplicable the compulsory arbitration provisions hereof. Without
limitation of the foregoing, the parties shall be entitled to the benefits of
each and all of the remedies and assistance provided for by applicable law.
In Disputes involving indebtedness or other monetary obligations, each
party agrees that the other party may proceed against all liable persons,
jointly and severally, or against one or more of them, less than all, without
impairing rights against other liable persons. Nor shall a party be required
to join the principal obligor or any other liable persons (e.g., sureties or
guarantors) in any proceeding against a particular person. A party may release
or settle with one or more liable persons as the party deems fit without
releasing or impairing rights to proceed against any persons not so released.
STATUTE OF LIMITATION. All statutes of limitation that would
otherwise be applicable shall apply to any arbitration proceeding.
SCOPE OF AWARD: MODIFICATION OR VACATION OF AWARD: QUALIFICATIONS.
The arbitrators shall resolve all Disputes in accordance with the applicable
substantive law. Any arbitrators shall be practicing attorneys licensed to
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practice law in the State of Texas and shall be knowledgeable in the subject
matter of the Dispute. With respect to a Dispute in which the claim or amount
in controversy does not exceed $1 million, a single arbitrator (who shall have
authority to render a maximum award of $1 million, including all damages of any
kind and costs, fees and the like) shall be chosen and shall decide the
Dispute.
With respect to a Dispute in which the claim or amount in controversy
exceeds $1 million, the Dispute shall be decided by a majority vote of three
(3) arbitrators. The arbitrators may grant any remedy or relief that the
arbitrators deem just and equitable and within the scope of this Arbitration
Program. The arbitrators may also grant such ancillary relief as is necessary
to make effective the award. In all arbitration proceedings in which the
amount in controversy exceeds $1 million in the aggregate, the arbitrators
shall make specific, written findings of fact and conclusions of law. IN all
arbitration proceedings in which the amount in controversy exceeds $1 million,
in the aggregate, the parties shall have, in addition to the limited statutory
right to seek vacation of modification of an award pursuant to applicable law,
the right to seek vacation or modification of any award that is based in whole
or in part on an incorrect ruling of law; provided, however, that any such
application for vacation or modification of an award based on an incorrect
ruling of law must be filed in a court having jurisdiction over the Dispute
within fifteen (15) days from the date the award is rendered. The arbitrators'
findings of fact shall be binding on all parties and shall not be subject to
further review except as otherwise allowed by applicable law.
OTHER MATTERS AND MISCELLANEOUS. To the maximum extent practicable,
an arbitration proceeding hereunder shall be concluded within 180 days of the
filing of the Dispute with the AAA. Arbitration proceedings hereunder shall be
conducted at one of the following locations in the State of Texas agreed to in
writing by the parties or, in the absence of such agreement, selected by the
AAA: (1) Austin; (2) Dallas; (3) Forth Worth; (4) Houston; or (5) San Antonio.
Arbitrators shall be empowered to impose sanctions and to take such other
actions as the arbitrators deem necessary to the same extent a judge could do
pursuant to the Federal Rules of Civil Procedure, the Texas Rules of Civil
Procedure, and applicable law.
This Arbitration Program constitutes the entire agreement of the
parties with respect to its subject matter and supersedes all prior
discussions, arrangements, negotiations, and other communications on dispute
resolution. The provisions of this Arbitration Program shall survive any
termination, amendment, or expiration of the Documents, unless the parties
otherwise expressly agree in writing. To the extent permitted by applicable
law, the arbitrator shall have the power to award recovery of all costs and
fees (including attorneys' fees, administrative fees, and arbitrators' fees) to
the prevailing party.
This Arbitration Program may be amended, changed, or modified only by
the express provisions of a writing which specifically refers to this
Arbitration Program and which is signed by all the parties hereto. If any
term, covenant, condition or provision of this Arbitration Program is found to
be unlawful or invalid or unenforceable, such illegality or invalidity or
unenforceability shall not affect the legality, validity or enforceability of
the remaining parts of this Arbitration Program, and all such remaining parts
hereof shall be valid and enforceable and have full force and effect as if the
illegal, invalid or unenforceable part had not be included.
The captions or headings in this Arbitration Program are for
convenience of reference only and are not intended to constitute any part of
the body or text of this Arbitration Program. Each party agrees to keep all
Disputes and arbitration proceedings strictly confidential, except for
disclosures of information required in the ordinary course of business of the
parties or by applicable law or regulation.
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EXHIBIT "E"
2297325
RENEWAL AND EXTENSION
OF
NOTE AND DEED OF TRUST
THE STATE OF TEXAS }
} WITNESSETH:
COUNTY OF BEXAR }
THAT LANCER CORPORATION, a Texas corporation (the "Debtors," whether
one or more), whose address is 000 X. Xxxxx, Xxx Xxxxxxx, Xxxxx 00000, are
indebted unto FIRST INTERSTATE BANK OF TEXAS, N.A. (the "Lender"), as evidenced
by that Deed of Trust Note of the Debtors payable to the order of the First
Republic Bank San Antonio, N.A., in the original principal amount of
$9,000,000.00, dated October 16, 1987 (the "Note"), which obligation is
secured, in part, by the lien of a deed of trust of even date therewith (the
"Deed of Trust"), duly recorded in Volume 4159, Page 415, of the Official
Public Records of Bexar County, Texas; which Note and Deed of Trust have been
transferred to the Lender by instrument duly recorded in the Real Property
Records of Bexar County, Texas; said Note and lien having been previously
renewed, extended and rearranged, but not extinguished, by instruments executed
and filed from time to time, the most recent of which having been recorded at
Volume 5128, Page 1644, of the Real Property Records of Bexar County, Texas,
and to which reference is hereby made (all liens and security interests
securing the Note being hereinafter sometimes referred to as the "Liens"), on
and affecting the real estate in Bexar County, Texas (the "Real Estate")
Described as follows:
Xxx 0, Xxxxx 0, XXXXXX XXXXX, XXXX 0, Xxxxx Xxxxxx, Texas, according
to plat thereof recorded in Volume 9517, Pages 00-00, Xxxx xxx Xxxx Xxxxxxx
xx Xxxxx Xxxxxx, Xxxxx;
WHEREAS, the Debtors desire to renew, extend and rearrange the time or
manner of payment of the Note and to extend and carry forward the Liens on the
Real Estate and on the other property and assets subject thereto in full force
and effect, and in consideration of the premises and undertakings herein
stated, and at the request of the Debtors, the Lender has agreed to renew,
extend and rearrange the time and manner of payment of the Note as hereafter
provided:
NOW, THEREFORE, the Debtors and the Lender hereby agree as follows:
1. As of the date this instrument is executed, the Debtors are
indebted to the Lender in the amount of $2,000,000.00 of principal under the
Note.
2. The terms of payment of all indebtedness outstanding under the
Note are hereby rearranged, modified and renewed as follows:
Principal on the Note shall be due and payable in installments of
$55,555.56 each, plus interest accrued on the unpaid principal to the date each
such installment is paid, commencing on August 31, 1992, and continuing
regularly thereafter on the same day of each calendar month (or on the last day
of the month in the event any calendar month has no such date) until July 31,
1995, when the entire amount of the Note, principal and interest then remaining
unpaid, shall be due and payable. Each 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 Lender shall
determine in its sole discretion.
3. From the effective date hereof until maturity, interest
(calculated on the basis of a year of 360 days for the actual number of days
elapsed) shall accrue on the unpaid principal balance of the Note at a rate
per annum
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equal to the lesser of (I) the Prime Rate (as hereinafter defined) plus one
percent (1.00% or (ii) the Maximum Lawful Rate. After maturity (whether by
acceleration or otherwise) until paid, interest shall accrue on the matured
principal and accrued, but unpaid, interest on the Note at a rate per annum
equal to the lesser of (I) the Prime Rate plus three percent (3.00% or (ii) the
Maximum Lawful Rate. The interest rate shall be adjusted concurrently with
changes in the Prime Rate without notice to the Debtors.
As used herein, the term "Prime Rate," shall mean that rate of
interest equal on any given day to the rate of interest most recently
established by the Lender as its prime rate and entered as such in its records,
whether or not such rate is otherwise published. The Prime Rate will
automatically fluctuate upward and downward, without special notice to the
Debtors or any other person. THE PRIME RATE MAY NOT BE THE BEST OR LOWEST RATE
OR A FAVORED RATE OF INTEREST, AND ANY REPRESENTATION OR WARRANTY IN THAT
REGARD IS EXPRESSLY DISCLAIMED.
The term "Maximum Lawful Rate," as used herein, shall mean the greater
of (I) the highest non-usurious rate of interest permitted by applicable United
States law, or (ii) a rate per annum equal to the indicated rate ceiling
determined weekly in accordance with the computation specified in Article
5069-1.04, Vernon's Texas Civil Statutes, 1925, as amended, as such indicated
rate ceiling is in effect from time to time, but in no event greater than
twenty-eight percent (28.00%) per annum. Unless precluded by law, changes in
the Maximum Lawful Rate created by statute or governmental action during the
term of the Note shall be immediately applicable to the Note on the effective
date of such changes.
If the Maximum Lawful Rate is increased by statute or other
governmental action subsequent to the date hereof, then the Debtors agree that
the new Maximum Lawful Rate will be applicable hereto from the effective date
of the new Maximum Lawful Rate, unless such application is precluded by the
statute or governmental action or by the general law of the jurisdiction
governing the transaction evidenced hereby. In the event that no Maximum
Lawful Rate exists, then the term "Maximum Lawful Rate" shall be deemed to mean
a rate per annum equal to five percent (5%) greater than the Prime Rate.
4. To the extent not prohibited by law, the Debtors will pay, or
reimburse the Lender for, all reasonable 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 Lender) in connection with the
negotiation, preparation, execution, filing, recording, refiling and
re-recording of this instrument, the Deed of Trust 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 Lender in connection herewith; all
reasonable 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
instrument; and all reasonable costs (including attorney's fees) of reviewing
title opinions and security opinions relating to the debt described in this
instrument. The Debtors will reimburse the Lender for all reasonable amounts
expended by the Lender to satisfy any obligation of the Debtors under this
instrument or the Deed of Trust or to protect the Real Estate. In addition,
whether or not a default shall have occurred, the Debtors will pay, or
reimburse the Lender for, all reasonable costs and expenses, of every character
incurred or expended from time to time in connection with the protection of the
Real Estate, the exercise by the Lender of any of its rights and remedies
hereunder or at law, including, but not limited to, insurance premiums, Uniform
Commercial Code search fees, fees incident to title searches and reports,
investigation costs, escrow fees, attorneys' fees, legal expenses, court costs,
fees of governmental authorities, and all reasonable fees and expenses incurred
in connection with the marshalling, guarding, management, operation, removal,
maintenance, cleanup, storage, auction and liquidation of the Real Estate. Any
amount to be paid or reimbursed by the Debtors to the Lender shall be a demand
obligation owing by the Debtors to the Lender and, to the extent not prohibited
by law, shall bear interest from the date of expenditure by the Lender until
paid at the rate of eighteen percent (18%) per annum.
5. The Liens are extended and renewed until the indebtedness
represented by the Note (together with all other indebtedness secured by the
Liens) as so extended has been fully and finally paid. Nothing herein shall
affect or impair the Note or the Liens, except to the extent herein expressly
rearranged and extended; all terms and provisions of the
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Note and of the instrument or instruments creating or fixing the Liens shall be
and remain in full force and effect as therein written (except to the extent
specifically modified hereby); and the Liens shall not in any manner be waived;
the purposes of this instrument being simply to extend and rearrange the time
or manner of payment of the Note and to carry forward all the Liens, which are
acknowledged by the Debtors to be valid and subsisting, except as otherwise
expressly provided herein.
6. Without limiting any provision of the Note, payment of the
Note is secured by, and the Note as affected hereby is entitled to the benefits
of, all security agreements, collateral assignments, deeds of trust, mortgages
and lien instruments executed by the Debtors, heretofore or hereafter executed
in favor of, or for the benefit of, the Lender or other holder of the Note.
7. All agreements and transactions between the Debtors and the
Lender, 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, prepayment, late payment, demand for
prepayment or otherwise, shall the amount contracted for, charged or received
by the Lender from the Debtors for the use, forbearance or detention of the
principal indebtedness or interest hereof, which remains unpaid from time to
time, exceed the maximum amount permissible under applicable law, it
particularly being the intention of the parties hereto to conform strictly to
the applicable laws of usury. Any interest payable hereunder or under any
other instrument relating to the loan evidenced hereby that is in excess of the
legal maximum, shall, in the event of acceleration of maturity, prepayment,
late payment, demand for prepayment or otherwise, be automatically, as of the
date of such acceleration, prepayment, demand or otherwise, applied to a
reduction of the principal indebtedness hereof and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of such
principal, such excess shall be refunded to the Debtors. To the extent not
prohibited by law, determination of the legal maximum amount of interest shall
at all times be made by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the loan, all interest
at any time contracted for, charged or received from the Debtors in connection
with the loan, so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof.
8. If any payment in respect of the Note or the Deed of Trust
falls due on a Saturday, Sunday or public holiday on which the Lender is
authorized or required by law to be closed, the due date for such payment shall
be extended to the first day on which the Lender shall be open for business,
and such extension of time shall be included in the computation of interest
with respect to such payment.
9. As amended and affected hereby, the Note, the Deed of Trust
and the Liens remain in full force and effect. This Renewal and Extension
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas.
10. Arbitration. This Agreement and the other Loan Documents
shall be subject to the terms and conditions of the Arbitration Program as
described on Exhibit "A" attached hereto and incorporated herein by this
reference for all pertinent purposes.
11. To the extent allowed by law, the parties hereto agree to be
bound by the terms of the following notice:
NOTICE
NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THIS LOAN
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS
LOAN.
EXECUTED this the _____ day of July, 1992.
LANCER CORPORATION, A TEXAS
CORPORATION
BY:_______________________
NAME:_____________________
TITLE:____________________
"DEBTORS"
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AGREED TO AND ACCEPTED:
FIRST INTERSTATE BANK OF TEXAS, N.A.
BY:______________________
NAME:____________________
TITLE:___________________
"LENDER"
1992, by _______________________, _________________ of LANCER CORPORATION, a
Texas corporation, on behalf of said corporation.
___________________________________
Notary Public, State of Texas
THE STATE OF TEXAS Section
COUNTY OF BEXAR Section
This instrument was acknowledged before me on the _____ day of July, 1992, by
___________________________________, ____________________________ of FIRST
INTERSTATE BANK OF TEXAS, N.A., a national banking association, on behalf of
said association.
___________________________________
Notary Public, State of Texas
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AFTER RECORDING RETURN TO:
First Interstate Bank of Texas, N.A.
One Riverwalk Place
000 X. Xx. Xxxx'x Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
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EXHIBIT "F"
MODIFICATION AGREEMENT
THE STATE OF TEXAS }
}
COUNTY OF BEXAR }
This Modification Agreement (the "Agreement") is between NUEVA
DISTRIBUIDORA LANCERMEX S.A. de C.V. (the "Borrower," whether one or more),
LANCER CORPORATION, a Texas corporation (the "Grantor") and FIRST INTERSTATE
BANK OF TEXAS, N.A., a national association (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower is legally obligated to pay that certain
promissory note (the "Note") in the original principal sum of $1,000,000.00,
dated November 8, 1994, executed by the Borrower, payable to the order of the
Lender, more fully described in a Fourth Modification of Deeds of Trust (the
"Fourth Modification"), executed by the Grantor and duly recorded in the Real
Property Records of Bexar County, Texas, the Note being secured by the liens
therein created or mentioned against all of that real property (the "Property")
described as follows:
TRACT 1: Xxx 0, Xxxxx 0, XXXXXX XXXXX, XXXX 0, Xxxxx Xxxxxx, Texas,
according to the map or plat thereof recorded in Volume 9517, Pages 00-00, Xxxx
xxx Xxxx Xxxxxxx xx Xxxxx Xxxxxx, Xxxxx; and
TRACT 2: Xxx 0, Xxxxx 0, XXXXXX XXXXX, XXXX 0, Xxxxx Xxxxxx, Texas,
according to the map or plat thereof recorded in Volume 9517, Pages 00-00, Xxxx
xxx Xxxx Xxxxxxx xx Xxxxx Xxxxxx, Xxxxx;
WHEREAS, the Borrower now desires to modify certain terms of the Note,
and the Grantor desires to extend and carry forward said liens on the Property;
and
WHEREAS, the Lender, the legal owner and holder of the Note and of the
liens securing the same, at the request of the Borrower and the Grantor, has
agreed to modify the terms of the Notes as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged,
the parties agree as follows:
1. The Note shall be due and payable as follows:
Interest only shall be due and payable in installments commencing on May
15, 1995, and continuing regularly thereafter on the same day of each calendar
month until July 31, 1995, when the entire amount of the Note, principal and
interest then remaining unpaid, shall be due and payable.
2. The Borrower and the Grantor ratify and confirm the liens on
the Property until the indebtedness described in the Fourth Modification,
including the Note as so modified, has been fully paid, and agrees that such
modification shall in no manner affect or impair the Note or the liens securing
the same and that said liens shall not in any manner be waived, the purpose of
this instrument being simply to modify the amount, time, or manner of payment
of the Note and to carry forward all liens securing the same, which the
Borrower and the Grantor hereby acknowledge to be valid and subsisting.
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3. The Borrower, the Grantor and each guarantor, surety, and
endorser waives grace, demand, presentment, and all notices, including notice
of dishonor, notice of intent to accelerate, notice acceleration, protest, and
notice of default; and agrees that waiver of any default will not constitute
waiver of any prior subsequent default.
4. To the extent not prohibited by law, the Borrower and the
Grantor will pay, or reimburse the Lender for all reasonable 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
Lender) in connection with the negotiation, preparation, execution, filing,
recording, refiling and re-recording of this instrument, the Fourth
Modification 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 Lender in connection herewith; all reasonable 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 instrument; and all reasonable costs
(including attorneys' fees) of reviewing title opinions and security opinions
relating to the debt described in this instrument. The Borrower and the
Grantor will reimburse the Lender for all reasonable amounts expended by the
Lender to satisfy any obligation of the Borrower or the Grantor under this
instrument or the Fourth Modification or to protect the Property. In addition,
whether or not a default shall have occurred, the Borrower and the Grantor will
pay, or reimburse the Lender for, all reasonable costs and expenses, of every
character incurred or expended from time to time in connection with the
protection of the Property, the exercise by the Lender of any of its rights and
remedies hereunder or at law, including, but not limited to, insurance
premiums, Uniform Commercial Code search fees, fees incident to title searches
and reports, investigation costs, escrow fees, attorneys' fees, legal expenses,
court costs, fees of governmental authorities, and all reasonable fees and
expenses incurred in connection with the marshalling, guarding, management,
operation, removal, maintenance, cleanup, storage, auction and liquidation of
the Property. Any amount to be paid or reimbursed by the Borrower or the
Grantor to the Lender shall be a demand obligation and, to the extent not
prohibited by law, shall bear interest from the date of expenditure by the
Lender until paid at the rate of eighteen percent (18%) per annum.
5. All agreements and transactions between the Borrower and the
Lender, 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, prepayment, late payment, demand for
prepayment or otherwise, shall the amount contracted for, charged or received
by the Lender from the Borrower for the use, forbearance or detention of the
principal indebtedness or interest hereof, which remains unpaid from time to
time, exceed the maximum amount permissible under applicable law, it
particularly being the intention of the parties hereto to conform strictly to
the applicable laws of usury. Any interest payable hereunder or under any
other instrument relating to the loan evidenced hereby that is in excess of the
legal maximum, shall, in the event of acceleration of maturity, prepayment,
late payment, demand for prepayment or otherwise, be automatically, as of the
date of such acceleration, prepayment, demand or otherwise, applied to a
reduction of the principal indebtedness hereof and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of such
principal, such excess shall be refunded to the Borrower. To the extent not
prohibited by law, determination of the legal maximum amount of interest shall
at all times be made by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the loan, all interest
at any time contracted for, charged or received from the Borrower in connection
with the loan, so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof.
6. The Borrower and the Grantor agree that all terms and
provisions of the Note and of the instrument or instruments creating or fixing
the liens securing the same shall be and remain in full force and effect as
therein written, except as otherwise expressly provided herein.
NOTICE TO MAKERS (BORROWER): THIS LOAN IS PAYABLE IN FULL ON DEMAND OR AT
MATURITY. AT MATURITY OR IF PAYMENT IS DEMANDED, YOU MUST REPAY THE ENTIRE
PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS
UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE,
BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR YOU WILL HAVE
TO FIND A LENDER, WHICH MAY BE
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THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE MONEY. IF YOU
REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING
COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM
THE SAME LENDER.
EXECUTED this the _____ day of June, 1995, to be effective as of May
15, 1995.
NUEVA DISTRIBUIDORA LANCERMEX S.A. de C.V.
By:_____________________________
Name:___________________________
Title:__________________________
"Borrower"
AGREED:
LANCER CORPORATION, a Texas
corporation
By:_____________________________
Name:___________________________
Title:__________________________
AGREED TO AND ACCEPTED:
FIRST INTERSTATE BANK OF TEXAS, N.A.,
a national banking association
By:_____________________________
Name:___________________________
Title:__________________________
"Lender"
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THE STATE OF TEXAS }
}
COUNTY OF BEXAR }
This instrument was acknowledged before me on the ______ day of June,
1995, by ________________________________________________________,
__________________________________________ of NUEVA DISTRIBUIDORA LANCERMEX
S.A. de C.V.
___________________________________
Notary Public, State of Texas
THE STATE OF TEXAS }
}
COUNTY OF BEXAR }
This instrument was acknowledged before me on the ______ day of June,
1995, by ________________________________________________________,
______________________________ of LANCER CORPORATION, a Texas corporation, on
behalf of said corporation.
___________________________________
Notary Public, State of Texas
THE STATE OF TEXAS }
}
COUNTY OF BEXAR }
This instrument was acknowledged before me on the ______ day of June,
1995, by ______________________________________, ______________________________
of FIRST INTERSTATE BANK OF TEXAS, N.A., a national banking association, on
behalf of said association.
___________________________________
Notary Public, State of Texas
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AFTER RECORDING RETURN TO:
First Interstate Bank of Texas, N.A.
One Riverwalk Place
000 X. Xx. Xxxx'x Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Client and Matter Nos.: 1093-39
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PROMISSORY NOTE
$1,000,000.00 November 8, 1994
For value received, NUEVA DISTRIBUIDORA LANCERMEX S.A. DE C.V. (the
"Makers," whether one or more), unconditionally 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 ONE MILLION AND NO/100 DOLLARS ($1,000,000.00), or the
outstanding principal amount advanced hereunder, whichever is less, in legal
and lawful money of the United States of America, with interest thereon as
hereinafter specified.
TERMS OF PAYMENT:
Principal shall be due and payable in installments of $83,333.34 each,
plus interest accrued on the unpaid principal to the date each such installment
is paid, commencing on April 15, 1995, and continuing regularly thereafter on
the same day of each calendar month until March 15, 1996, when the entire
amount of this Note, principal and interest then remaining unpaid, shall be due
and payable. Each 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.
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.
RATE OF INTEREST:
From the date hereof until maturity, interest (calculated on the basis
of a year of 360 days for the actual number of days elapsed) shall accrue on
the unpaid principal balance of this Note at a rate per annum equal to the
lesser of (i) the Prime Rate MINUS one-fourth of one percent (0.25%) or (ii)
the Maximum Lawful Rate. After maturity (whether by acceleration or otherwise)
until paid, interest shall accrue on the matured principal and accrued, but
unpaid, interest on this Note at the Maximum Lawful Rate. The interest rate
shall be adjusted concurrently with changes in the Prime Rate without notice to
the Makers.
As used herein, the term "Prime Rate," shall mean that rate of
interest equal on any given day to the rate of interest most recently
established by the Payee as its prime rate and entered as such in its records,
whether or not such rate is otherwise published. The Prime Rate will
automatically fluctuate upward and downward, without special notice to the
Makers or any other person. THE PRIME RATE MAY NOT BE THE BEST OR LOWEST RATE
OR A FAVORED RATE OF INTEREST, AND ANY REPRESENTATION OR WARRANTY IN THAT
REGARD IS EXPRESSLY DISCLAIMED.
As used herein, the term "Maximum Lawful Rate" shall mean the greater
of (i) the highest non-usurious rate of interest permitted by applicable United
States law, or (ii) a rate per annum equal to the indicated rate ceiling
determined weekly in accordance with the computation specified in Article
5069-1.04, Vernon's Texas Civil Statutes, 1925, as amended, as such indicated
rate ceiling is in effect from time to time, but in no event greater than
twenty-eight percent (28%) per annum. Unless precluded by law, changes in the
Maximum Lawful Rate created by statute or governmental action during the term
of this Note shall be immediately applicable to this Note on the effective date
of
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such changes. In the event that no Maximum Lawful Rate exists, then the term
"Maximum Lawful Rate" shall be deemed to mean a rate per annum equal to the
Prime Rate, plus five percent (5.00%).
Notwithstanding the foregoing, if, at any time, the rate of interest
applicable to this Note (but for the limitation thereof to the Maximum Lawful
Rate) exceeds the Maximum Lawful Rate, the rate of interest to accrue on this
Note shall be limited to the Maximum Lawful Rate, but any subsequent reductions
in such rate of interest applicable to this Note (but for the limitation
thereof to the Maximum Lawful Rate) shall not reduce the rate of interest to
accrue on this Note below the Maximum Lawful Rate until the total amount of
interest which would have accrued if a varying rate per annum equal to the rate
of interest applicable to this Note (but for the limitation thereof to the
Maximum Lawful Rate) had at all times been in effect.
PREPAYMENT:
The Makers reserve 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.
USE OF PROCEEDS:
This Note represents funds advanced to the Makers at the Makers'
special instance and request and used in the payment of a portion of the
purchase price and expansion of a maquila plant.
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 if the Payee deems the Payee insecure because the prospect
of timely payment of this Note 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.
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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.
GOVERNING LAWS AND VENUE:
This Note shall be governed by, and construed in accordance with, the
laws of the State of Texas and the United States of America, without giving
effect to the principles of choice of laws thereof; provided, however, that in
connection with any legal action or proceeding (other than an action or
proceeding to enforce a judgment obtained in another jurisdiction) brought by
the Payee in any courts of Mexico or any political subdivision thereof, this
Note shall be deemed to be an instrument made under the laws of Mexico and for
such purposes shall be governed by, and construed in accordance with, the laws
of Mexico, and if any provision of this Note is invalid, legally ineffective,
or contrary to the laws of Mexico, it shall be excised and all other parts of
this Note shall remain in effect and binding.
The Makers hereby irrevocably submit to the jurisdiction of any
competent court of the City of Piedras Negras, State of Coahulia, Mexico, or of
the Federal District, Mexico, or of the United States District Court for the
Western District of Texas (San Antonio Division), United States of America, or
the District Courts of the State of Texas sitting in the Xxxxxx xx Xxxxx, Xxxxx
xx Xxxxx, Xxxxxx Xxxxxx of America, as the Payee may elect, in any action or
proceeding arising out of or relating to this Note, and the Makers hereby
irrevocably agree that claims with respect to such action or proceeding may be
held and determined in any of such courts. The Makers irrevocably waive, to
the fullest extent permitted by law, any objection which the Makers may now or
hereafter have to the laying of venue of any suit, action or proceeding with
respect to this Note brought in any court aforementioned, and the Makers
further irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. The
Makers hereby expressly waive all rights of any other jurisdiction which it may
now or hereafter have by reason of its present or subsequent domiciles.
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.
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EXECUTED in San Antonio, Bexar County, Texas on the date first stated
above.
NUEVA DISTRIBUIDORA LANCERMEX S.A.
de C.V.
By:________________________________
Name:______________________________
Title:_____________________________
111845.1
