FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "Amendment") is entered
into as of May 12, 1997, among LANCER PARTNERSHIP, LTD., a Texas limited
partnership ("Operating Subsidiary"), and NUEVA DISTRIBUIDORA LANCERMEX, S.A. de
C.V., a corporation organized under the laws of Mexico ("Mexico Subsidiary")
(Operating Subsidiary and Mexico Subsidiary are hereinafter referred to
individually as a "Borrower" and collectively as "Borrowers"); LANCER
CORPORATION, a Texas corporation ("Parent Company"); LAN-LEASING, INC., a
Delaware corporation, ("Lan-Leasing"), LANCER CAPITAL CORPORATION, a Delaware
corporation ("Lancer Capital"), LANCER INTERNATIONAL SALES, INC., a Texas
corporation ("Lancer International"), (Lan-Leasing, Lancer Capital, Lancer
International and Operating Subsidiary, individually, a "Guarantor" and
collectively, the "Guarantors"); and THE FROST NATIONAL BANK, a national banking
association, individually and as agent for the Banks acting in the manner and to
the extent provided in Article 8 (in such capacity, the "Agent"), NATIONSBANK,
N.A., successor to THE BOATMEN'S NATIONAL BANK OF ST. LOUIS, a national banking
association, individually, and each of the lenders which becomes a party hereto
as provided in Section 10.7 (individually, a "Bank" and collectively, the
"Banks").
Recitals
A. Borrowers, the Parent Company, the Agent and the other Banks have
heretofore entered into the Credit Agreement dated as of July 15, 1996 (as
amended, modified, restated and supplemented from time to time, the "Credit
Agreement").
B. Borrower has requested that the Banks agree to permanently increase
their aggregate Revolving Commitments from $17,500,000 to $25,000,000.
C. The Banks are willing to agree to such requested change on the terms
and conditions set forth in this Amendment.
Agreements
In consideration of the foregoing premises, the mutual agreements
contained herein and other good and valuable consideration and reasonably
equivalent value, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the respective meanings set
forth in the Credit Agreement.
2. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Extension of Permanent Increase in Revolving Commitments.
To reflect the permanent increase in the aggregate Revolving
Commitments of all Banks from $17,500,000 to $25,000,000, Annex A
attached to the Credit Agreement is hereby amended and replaced with
Annex A attached to this Amendment. All references in the Credit
Agreement and other Loan Documents to the "Revolving Commitments" of
the Banks shall thereafter refer to such revised amounts.
(b) Renewal Revolving Notes. To evidence Revolving Loans made
to Operating Subsidiary by each Bank up to the amount of such Bank's
Revolving Commitment, as revised hereby, Operating Subsidiary shall
execute and deliver to each Bank a Renewal Revolving Note in the form
attached hereto as Exhibit A, payable to the order of such Bank and in
a stated principal amount equal to such Bank's Revolving Commitment, as
revised hereby. On the date hereof, Borrower shall execute and deliver
to each Bank such a Renewal Revolving Note as a renewal, modification
and increase of the existing Revolving Note issued to such Bank
pursuant to the Credit Agreement. All references in the Credit
Agreement and the other Loan Documents to the "Revolving Notes" of the
Banks shall hereafter refer to the Renewal Revolving Notes executed and
delivered pursuant to this Amendment, as further amended, modified,
restated, supplemented, renewed, extended, increased, refinanced and/or
replaced from time to time.
(c) Limitation on Indebtedness. Section 6.2 is hereby
amended to read in its entirety as follows:
SECTION 6.2 Limitation on Indebtedness. Neither any
Borrower nor Parent Company will, and Parent Company will not
permit any Company to, incur, create, contract, assume, have
outstanding, permit or suffer to exist, Guarantee or otherwise
be or become, directly or indirectly, liable in respect of any
Indebtedness, except the following (collectively, "Permitted
Indebtedness"):
(i) the Obligations;
(ii) current liabilities for Taxes incurred
in the ordinary course of business which are not yet
due and payable;
(iii) trade payables arising in the ordinary
course of business;
(iv) Indebtedness listed in Schedule 6.2;
(v) forward contracts and other currency
hedging instruments executed to hedge existing or
anticipated exposure to currency fluctuations; and
(vi) the issuance or sale of convertible
senior notes by the Parent Company, provided that (A)
such notes are issued or sold for cash only, (B) the
net cash proceeds of such issuance or sale are
applied to repay certain Loans in accordance with the
Section 2.8 (d), (C) the net cash proceeds of such
issuance or sale do not exceed an amount equal to the
sum of (x) the aggregate principal amount of all Term
A Loans then outstanding and (y) the aggregate
principal amount of all Acquisition Loans then
outstanding, (D) such notes do not mature prior to
July 15, 2001, (E) such notes are unsecured, and (F)
the provisions of such notes, including, but not
limited to, the payment of principal thereunder and
the representations and warranties contained therein,
are approved in writing by all the Banks.
3. In order to induce the Agent and the Banks to enter into
this Amendment, each Borrower hereby represents and warrants to the Agent and
the Banks that, as of the date of this Amendment, (a) the representations and
warranties set forth in the Credit Agreement and each other Loan Document are
true and correct as if made on and as of the date hereof (other than those
representations and warranties expressly limited by their terms to a specific
date), (b) no Default or Event of Default has occurred and is continuing, and
(c) no event has occurred since the date of the most recent financial statements
delivered pursuant to Section 5.1 of the Credit Agreement that has caused a
Material Adverse Effect.
4. Each Borrower hereby acknowledges and agrees that no facts
events, status or conditions presently exist which, either now or with the
passage of time or the giving of notice or both, presently constitute or will
constitute a basis for any claim or cause of action against any of the Banks, or
any defense to the payment of any of the indebtedness evidenced or to be
evidenced by any of the Loan Documents.
5. Parent Company covenants and agrees that, as to the Parent
Guaranty executed and delivered by Parent Company in favor of the Banks as part
of the Loan Documents, (a) the Parent Guaranty is an unconditional guarantee of
payment and performance and not of collection, (b) the Parent Guaranty
represents the primary, absolute and unconditional obligation of Parent Company
and (c) the Parent Guaranty is a continuing guarantee and shall remain in full
force and effect until the termination of the obligations of the Banks to make
Loans and the indefeasible payment in full of the Obligations (as defined in the
Parent Guaranty).
6. Each Guarantor covenants and agrees that, as to the
Affiliate Guaranty executed and delivered by such Guarantor in favor of the
Banks as part of the Loan Documents, (a) such Affiliate Guaranty is an
unconditional guarantee of payment and performance and not of collection, (b)
such Affiliate Guaranty represents the primary, absolute and unconditional
obligation of such Guarantor, and (c) such Affiliate Guaranty is a continuing
guarantee and shall remain in full force and effect until the termination of the
obligations of the Banks to make Loans and the indefeasible payment in full of
the Obligations (as defined in each such Affiliate Guaranty).
7. As to the Stock Pledge Agreement executed and delivered by
Parent Company in favor of the Banks as a part of the Loan Documents, Parent
Company hereby ratifies and confirms the liens and security interests of the
Banks in and to all collateral covered by the Stock Pledge Agreement as security
for the prompt and full payment and performance of the obligations secured by
the Stock Pledge Agreement. In furtherance of the foregoing, all liens and
security interests of the Stock Pledge Agreement (which are hereby acknowledged
to be valid and subsisting) are hereby carried forward, continued, extended,
modified and renewed to secure the prompt and full payment and performance of
the obligations secured by the Stock Pledge Agreement.
8. Each Loan Document is hereby amended and modified to the
extent necessary to give full force and effect to the terms of this Amendment,
and each such Loan Document shall hereafter be construed and interpreted after
giving full force and effect to the terms of this Amendment. As amended,
modified and supplemented pursuant to this Amendment, each Borrower, Parent
Company and each Guarantor hereby ratify, confirm and restate each Loan Document
and agrees that each such Loan Document to which it is a party shall continue in
full force and effect. Each of the Loan Documents now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Credit
Agreement, as amended hereby, or as further evidence of or in connection with
the Credit Agreement, as amended hereby, are hereby amended to the extent
necessary so that any reference in any such documents, instruments or agreements
to the Credit Agreement shall be a reference to the Credit Agreement as amended
hereby.
9. In the event that any one or more of the provisions
contained in this Amendment shall be determined invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Amendment shall not be impaired in any way.
10. When required or implied by the context used, defined
terms used herein shall include the plural as well as the singular, and vice
versa.
11. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of Texas and applicable federal
laws of the United States of America. This Amendment has been entered into in
Bexar County, Texas and shall be performable for all purposes in Bexar County,
Texas. The courts within the State of Texas shall have jurisdiction over any and
all disputes arising under or pertaining to this Amendment; and any such dispute
shall be heard in the county or judicial district of the principal place of
business of The Frost National Bank.
12. This Amendment shall be binding upon and inure to the
benefit of all parties hereto and their respective successors and assigns;
provided, however, that neither of the Borrowers nor any of their respective
successors or assigns may, without the prior written consent of all of the
Banks, assign any rights, powers, duties or obligations hereunder.
13. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute but one and the same instrument.
14. This Amendment constitutes a Loan Document.
15. Upon execution of this Agreement by the Banks, each
Borrower, Parent Company and each of the Guarantors shall deliver to the Agent,
in form and substance satisfactory to the Agent, the certificates and documents
described on Annex B.
[signatures on following pages]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the day and year
first above written.
OPERATING SUBSIDIARY:
LANCER PARTNERSHIP, LTD.
By: LANCER CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President of Finance
MEXICO SUBSIDIARY:
LANCER DE MEXICO, S.A. de C.V.,
formerly known as NUEVA DISTRIBUIDORA
LANCERMEX, S.A. de C.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PARENT COMPANY:
LANCER CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
GUARANTORS:
LAN-LEASING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LANCER CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LANCER INTERNATIONAL SALES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
LANCER PARTNERSHIP, LTD.
By: LANCER CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
AGENT/BANKS:
THE FROST NATIONAL BANK,
Individually and as the Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
NATIONSBANK, N.A., successor to THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
0262684.05
Annex A-10
ANNEX A
THE FROST NATIONAL BANK
16. Domestic Lending Office:
The Frost National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
17. LIBOR Lending Office:
The Frost National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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18. Term A Commitment:$ 6,100,000
19. Term B Commitment:$ 1,400,000
20. Revolving Commitment:$ 12,500,000
21. Acquisition Commitment:$ 5,000,000
22. Total Commitment:$ 25,000,000
23. Information for Notices:
The Frost National Bank
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A
NATIONSBANK, N.A., successor to
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
24. Domestic Lending Office:
NationsBank, N.A.
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▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. LIBOR Lending Office:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
26. Term A Commitment:$ 6,100,000
27. Term B Commitment:$ 1,400,000
28. Revolving Commitment:$ 12,500,000
29. Acquisition Commitment:$ 5,000,000
30. Total Commitment:$25,000,000
31. Information for Notices:
NationsBank, N.A.
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▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A
Address for Operating Subsidiary:
Lancer Partnership, Ltd.
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Mexico Subsidiary:
Nueva Distribuidora Lancermex, S.A. de C.V.
c/o Lancer Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Parent Company:
Lancer Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
0262684.05
Annex B-11
ANNEX B
32. Each Borrower, Parent Company and each Guarantor shall
have provided to the Agent a certificate signed by the secretary of such
corporation, which secretary's office and signature shall be confirmed by
another officer of such corporation, dated as of the effective date of this
Amendment attaching thereto or containing therein, and certifying as to the
following: (i) corporate resolutions, as in effect and neither revoked nor
rescinded, duly adopted by the board of directors of such corporation
authorizing the execution, delivery and performance of this Amendment and all
other documents, instruments and agreements in connection therewith (the
"Amendment Documents") to which it is or will be a party, and the transactions
contemplated thereby; and (ii) names, incumbency and specimen signatures of the
officers of such corporation authorized to execute and deliver the Amendment
Documents to which such corporation is a party.
33. Operating Subsidiary shall have executed and delivered to
each Bank a Renewal Revolving Note in the form attached hereto as Exhibit A,
payable to the order of such Bank and in a stated principal amount equal to such
Bank's Revolving Commitment, as revised by this Amendment.
34. All other documents requested by the Agent in connection
with this Amendment.
