SECOND AMENDMENT TO CREDIT AGREEMENT


         This Second Amendment to Credit Agreement (this "Amendment") is entered
into as of December 31, 1997,  among LANCER  PARTNERSHIP,  LTD., a Texas limited
partnership  ("Operating  Subsidiary"),  and  LANCER DE  MEXICO,  S.A.  de C.V.,
formerly  known as NUEVA  DISTRIBUIDORA  LANCERMEX,  S.A. de C.V., a corporation
organized under the laws of Mexico ("Mexico  Subsidiary")  (Operating Subsidiary
and Mexico  Subsidiary are hereinafter  referred to individually as a "Borrower"
and  collectively  as  "Borrowers");  LANCER  CORPORATION,  a Texas  corporation
("Parent Company"); LAN-LEASING, INC., a Delaware corporation,  ("Lan-Leasing"),
LANCER CAPITAL CORPORATION, a Delaware corporation ("Lancer Capital") and LANCER
INTERNATIONAL      SALES,     INC.,     a     Texas     corporation     ("Lancer
International")(Lan-Leasing,  Lancer Capital, Lancer International and Operating
Subsidiary, individually, a "Guarantor" and collectively, the "Guarantors"); and
THE FROST NATIONAL BANK, a national  banking  association,  individually  and as
agent for the Banks acting in the manner and to the extent provided in Article 8
(in  such  capacity,  the  "Agent"),   NATIONSBANK,  N.A.,  a  national  banking
association,   successor  to  THE   BOATMEN'S   NATIONAL   BANK  OF  ST.  LOUIS,
individually,  and each of the lenders  which becomes a party hereto as provided
in Section 10.7 (individually, a "Bank" and collectively, the "Banks").


                                    Recitals

                  I.  Borrowers,  the  Parent  Company,  the Agent and the other
Banks have  heretofore  entered into the Credit  Agreement  dated as of July 15,
1996 (as amended,  modified,  restated and  supplemented  from time to time, the
"Credit Agreement").

                  II.  Borrower has  requested  that the Banks agree to increase
their aggregate Revolving Commitments from $25,000,000 to $30,000,000 until July
15, 1998, and to modify certain of the negative  covenants  contained in Section
6.1 of the Credit Agreement.

                  III. The Banks are willing to agree to such  requested  change
on the terms and conditions set forth in this Amendment.

                                   Agreements

         In  consideration  of the  foregoing  premises,  the mutual  agreements
contained  herein  and other  good and  valuable  consideration  and  reasonably
equivalent value, the receipt and sufficiency of which are hereby  acknowledged,
the parties hereto agree as follows:

                  A.        Definitions.  Unless otherwise defined herein, terms
defined in the  Credit  Agreement and  used  herein shall  have the  respective
meanings set forth in the Credit Agreement.

                  B.        Amendments.  The Credit Agreement is hereby amended
as follows:

                           1. Extension of Increase in Revolving Commitments. To
         reflect the  increase in the  aggregate  Revolving  Commitments  of all
         Banks from  $25,000,000  to  $30,000,000  until July 15, 1998,  Annex A
         attached to the Credit  Agreement is hereby  amended and replaced  with
         Annex A  attached  to this  Amendment.  All  references  in the  Credit
         Agreement and other Loan  Documents to the "Revolving  Commitments"  of
         the Banks shall thereafter refer to such revised amounts.

                           2. Renewal  Revolving  Notes.  To evidence  Revolving
         Loans  made to  Operating  Subsidiary  by each Bank up to the amount of
         such  Bank's  Revolving  Commitment,   as  revised  hereby,   Operating
         Subsidiary  shall execute and deliver to each Bank a Renewal  Revolving
         Note in the form attached  hereto as Exhibit A, payable to the order of
         such  Bank  and in a  stated  principal  amount  equal  to such  Bank's
         Revolving Commitment,  as revised hereby. On the date hereof,  Borrower
         shall execute and deliver to each Bank such a Renewal Revolving Note as
         a renewal,  modification  and increase of the existing  Revolving  Note
         issued to such Bank pursuant to the Credit Agreement. All references in
         the Credit  Agreement  and the other Loan  Documents to the  "Revolving
         Notes" of the Banks  shall  hereafter  refer to the  Renewal  Revolving
         Notes  executed and delivered  pursuant to this  Amendment,  as further
         amended,   modified,   restated,   supplemented,   renewed,   extended,
         increased, refinanced and/or replaced from time to time.

                           3.  Change of Name.  The  definition  of  "Australian
         Subsidiary"  in Annex A  attached  to the  Credit  Agreement  is hereby
         amended to read in its entirety as follows:

                           "Australian Subsidiary" means Lancer Pacific Pty Ltd,
                  an  Australian  corporation, formerly  known  as  Glenn Pleass
                  Holdings Pty. Ltd.

                           4.  Section  6.1(b) is hereby  amended to read in its
entirety as follows:


                           (b) the ratio of (i) EBIT of the Companies determined
                  on a consolidated basis for the four-quarter  period ending as
                  of the end of any Fiscal Quarter to (ii) the interest  expense
                  of the Companies  determined on a  consolidated  basis for the
                  four-quarter  period  ending  as of  the  end  of  any  Fiscal
                  Quarter,  to be less than set out below opposite the period in
                  which such Fiscal Quarter ends;  provided,  however,  for each
                  Fiscal  Quarter in which an Acquisition  is  consummated,  and
                  each  Fiscal  Quarter  ending  prior  thereto,  the  financial
                  information  necessary to determine the foregoing  ratio shall
                  be adjusted to reflect, on a pro forma basis, such Acquisition
                  as if it had occurred as of the beginning of the first of such
                  Fiscal   Quarters   included  in  the  relevant   four-quarter
                  measurement period:

                  Fiscal Quarters Ended On or About                    Ratio

                  Closing Date through 9/30/97                      3.50 to 1.00
                  10/1/97 through 6/30/98                           3.00 to 1.00
                  7/1/98 through 7/15/01                            3.50 to 1.00

                           5.  Section  6.1(c) is hereby  amended to read in its
entirety as follows:

                           (c)  the  ratio  of (i)  EBIT  of  the  US  Companies
                  determined on a consolidated  basis  (consolidated  only as to
                  the US Companies) for the four-quarter period ending as of the
                  end of any Fiscal Quarter to (ii) the interest  expense of the
                  US Companies  determined on a consolidated basis (consolidated
                  only  as to the US  Companies)  for  the  four-quarter  period
                  ending as of the end of any  Fiscal  Quarter,  to be less than
                  set out below opposite the period in which such Fiscal Quarter
                  ends;  provided,  however, for each Fiscal Quarter in which an
                  Acquisition  involving a US Company is  consummated,  and each
                  Fiscal Quarter ending prior thereto, the financial information
                  necessary to determine the  foregoing  ratio shall be adjusted
                  to reflect,  on a pro forma basis,  such  Acquisition as if it
                  had  occurred as of the  beginning of the first of such Fiscal
                  Quarters  included in the  relevant  four-quarter  measurement
                  period:

                  Fiscal Quarters Ended On or About                Ratio

                  Closing Date through 9/30/97                     2.25 to 1.00
                  10/1/97 through 6/30/98                          2.00 to 1.00
                  7/1/98 through 7/15/01                           2.25 to 1.00


                           6.  Section  6.1(g) is hereby  amended to read in its
entirety as follows:

                           (g) the ratio of (i) Total  Funded Debt as of the end
                  of any  Fiscal  Quarter  to (ii)  Consolidated  EBITDA for the
                  four-quarter  period  ending  as of  the  end of  such  Fiscal
                  Quarter,  to be more than set out below opposite the period in
                  which such Fiscal Quarter ends;  provided,  however,  for each
                  Fiscal  Quarter in which an Acquisition  is  consummated,  and
                  each  Fiscal  Quarter  ending  prior  thereto,  the  financial
                  information  necessary to determine  Consolidated EBITDA shall
                  be adjusted to reflect, on a pro forma basis, such Acquisition
                  as if it had occurred as of the beginning of the first of such
                  Fiscal   Quarters   included  in  the  relevant   four-quarter
                  measurement period:

                           Fiscal Quarters Ended On or About          Ratio

                           Closing Date through 9/30/97            3.00 to 1.00
                           10/1/97 through 6/30/98                 3.25 to 1.00
                           7/1/98 through 6/30/99                  2.75 to 1.00
                           7/1/99 through 6/30/00                  2.50 to 1.00
                           7/1/00 through 7/15/01                  2.25 to 1.00
                  C. C. In order to induce the Agent and the Banks to enter into
this Amendment,  each Borrower  hereby  represents and warrants to the Agent and
the Banks that, as of the date of this Amendment,  (a) the  representations  and
warranties  set forth in the Credit  Agreement  and each other Loan Document are
true and  correct  as if made on and as of the date  hereof  (other  than  those
representations  and warranties  expressly  limited by their terms to a specific
date),  (b) no Default or Event of Default has occurred and is  continuing,  and
(c) no event has occurred since the date of the most recent financial statements
delivered  pursuant  to Section  5.1 of the Credit  Agreement  that has caused a
Material Adverse Effect.

                  D. Each Borrower hereby  acknowledges and agrees that no facts
events,  status or  conditions  presently  exist  which,  either now or with the
passage of time or the giving of notice or both,  presently  constitute  or will
constitute a basis for any claim or cause of action against any of the Banks, or
any  defense  to the  payment  of any of  the  indebtedness  evidenced  or to be
evidenced by any of the Loan Documents.

                  E. Parent Company  covenants and agrees that, as to the Parent
Guaranty  executed and delivered by Parent Company in favor of the Banks as part
of the Loan Documents,  (a) the Parent Guaranty is an unconditional guarantee of
payment  and  performance  and  not  of  collection,  (b)  the  Parent  Guaranty
represents the primary,  absolute and unconditional obligation of Parent Company
and (c) the Parent  Guaranty is a continuing  guarantee and shall remain in full
force and effect until the  termination of the  obligations of the Banks to make
Loans and the indefeasible payment in full of the Obligations (as defined in the
Parent Guaranty).

                  F. Each of the  undersigned  Guarantors  covenants  and agrees
that, as to the Affiliate  Guaranty  executed and delivered by such Guarantor in
favor of the Banks as part of the Loan Documents, (a) such Affiliate Guaranty is
an unconditional guarantee of payment and performance and not of collection, (b)
such  Affiliate  Guaranty  represents  the primary,  absolute and  unconditional
obligation of such  Guarantor,  and (c) such Affiliate  Guaranty is a continuing
guarantee and shall remain in full force and effect until the termination of the
obligations of the Banks to make Loans and the  indefeasible  payment in full of
the Obligations (as defined in each such Affiliate Guaranty).

                  G. As to the Stock Pledge Agreement  executed and delivered by
Parent  Company  in favor of the Banks as a part of the Loan  Documents,  Parent
Company  hereby  ratifies and  confirms the liens and security  interests of the
Banks in and to all collateral covered by the Stock Pledge Agreement as security
for the prompt and full payment and  performance of the  obligations  secured by
the Stock Pledge  Agreement.  In  furtherance  of the  foregoing,  all liens and
security interests of the Stock Pledge Agreement (which are hereby  acknowledged
to be valid and subsisting)  are hereby carried  forward,  continued,  extended,
modified  and renewed to secure the prompt and full payment and  performance  of
the obligations secured by the Stock Pledge Agreement.

                  H. Each Loan  Document is hereby  amended and  modified to the
extent  necessary to give full force and effect to the terms of this  Amendment,
and each such Loan Document shall hereafter be construed and  interpreted  after
giving  full  force  and  effect  to the terms of this  Amendment.  As  amended,
modified and  supplemented  pursuant to this  Amendment,  each Borrower,  Parent
Company and each Guarantor hereby ratify, confirm and restate each Loan Document
and agrees that each such Loan Document to which it is a party shall continue in
full force and effect.  Each of the Loan Documents now or hereafter executed and
delivered  pursuant  to the terms  hereof or pursuant to the terms of the Credit
Agreement,  as amended hereby,  or as further  evidence of or in connection with
the Credit  Agreement,  as  amended  hereby,  are  hereby  amended to the extent
necessary so that any reference in any such documents, instruments or agreements
to the Credit  Agreement shall be a reference to the Credit Agreement as amended
hereby.

                  I.  In the  event  that  any  one or  more  of the  provisions
contained  in  this   Amendment   shall  be  determined   invalid,   illegal  or
unenforceable  in any  respect  for  any  reason,  the  validity,  legality  and
enforceability  of any such  provision or  provisions in every other respect and
the remaining provisions of this Amendment shall not be impaired in any way.

                  J. When required or implied by the context used, defined terms
used herein shall include the plural as well as the singular, and vice versa.

                  K.  This  Amendment  shall be  governed  by and  construed  in
accordance  with the internal laws of the State of Texas and applicable  federal
laws of the United  States of America.  This  Amendment has been entered into in
Bexar County,  Texas and shall be performable  for all purposes in Bexar County,
Texas. The courts within the State of Texas shall have jurisdiction over any and
all disputes arising under or pertaining to this Amendment; and any such dispute
shall be heard in the county or  judicial  district  of the  principal  place of
business of The Frost National Bank.

                  L.  This  Amendment  shall be  binding  upon and  inure to the
benefit of all  parties  hereto and their  respective  successors  and  assigns;
provided,  however,  that neither of the Borrowers  nor any of their  respective
successors  or assigns  may,  without  the prior  written  consent of all of the
Banks, assign any rights, powers, duties or obligations hereunder.

                  M.  This   Amendment   may  be   executed  in  any  number  of
counterparts and by different parties hereto on separate  counterparts,  each of
which when so executed  shall be deemed to be an original  and all of which when
taken together shall constitute but one and the same instrument.

                  N.        This Amendment constitutes a Loan Document.

                  O.  Upon  execution  of  this  Amendment  by the  Banks,  each
Borrower,  Parent Company and each of the Guarantors shall deliver to the Agent,
in form and substance  satisfactory to the Agent, the certificates and documents
described on Annex B.

                         [signatures on following page]


<PAGE>


         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/ John P. Herbots
                              Name: John P. Herbots
                        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/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President


                                 PARENT COMPANY:

                               LANCER CORPORATION


                             By: /s/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President

                                   GUARANTORS:

                                LAN-LEASING, INC.


                             By: /s/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President

                           LANCER CAPITAL CORPORATION


                             By: /s/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President



                        LANCER INTERNATIONAL SALES, INC.


                             By: /s/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President


                            LANCER PARTNERSHIP, LTD.

                         By: LANCER CAPITAL CORPORATION


                             By: /s/ John P. Herbots
                              Name: John P. Herbots
                              Title: Vice President



                                  AGENT/BANKS:

                            THE FROST NATIONAL BANK,
                          Individually and as the Agent


                             By: /s/ Beth M. Weakley
                              Name: Beth M. Weakley
                          Title: Senior Vice President


                       NATIONSBANK, N.A., successor to THE
                      BOATMEN'S NATIONAL BANK OF ST. LOUIS


                            By: /s/ Steven A. Linton
                             Name: Steven A. Linton
                         Title: Assistant Vice President



<PAGE>






                                   Annex A-10

                                     ANNEX A



THE FROST NATIONAL BANK

1.        Domestic Lending Office:

         The Frost National Bank
         100 West Houston Street
         San Antonio, Texas   78205

2.        LIBOR Lending Office:

         The Frost National Bank
         100 West Houston Street
         San Antonio, Texas   78205

3.            Term A Commitment:$ 6,100,000

4.            Term B Commitment:$ 1,400,000

5.            Revolving Commitment:$ 12,500,000 (Closing Date through   /  /97)
                                   $ 15,000,000 (  /  /97 through 7/15/98)
                                   $ 12,500,000 (7/16/98 through 7/15/01)

6.            Acquisition Commitment:$ 5,000,000

7.            Total Commitment:$25,000,000

8.        Information for Notices:

         The Frost National Bank
         100 West Houston Street
         San Antonio, Texas   78205
         Attention:        Beth Weakley
         Phone:   (210) 220-5393
         Fax:              (210) 220-4626


<PAGE>


                                     ANNEX A



NATIONSBANK, N.A., successor to
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS



<PAGE>


9.        Domestic Lending Office:

         NationsBank, N.A.
         800 Market Street
         St. Louis, Missouri 63166

10.       LIBOR Lending Office:

         NationsBank, N.A.
         800 Market Street
         St. Louis, Missouri 63166

11.      Term A Commitment:$ 6,100,000

12.      Term B Commitment:$ 1,400,000

13.      Revolving Commitment:$ 12,500,000 (Closing Date through   /  /97)
                              $ 15,000,000 (  /  /97 through 7/15/98)
                              $ 12,500,000 (7/16/98 through 7/15/01)

14.      Acquisition Commitment:$ 5,000,000

15.      Total Commitment:$25,000,000

16.      Information for Notices:

         NationsBank, N.A.
         800 Market Street
         St. Louis, Missouri 63166
         Attention:        Steven A. Linton
         Phone:   (314) 466-7061
         Fax:              (314) 466-6499




<PAGE>


                                     ANNEX A




Address for Operating Subsidiary:

         Lancer Partnership, Ltd.
         235 West Turbo
         San Antonio, Texas   78216
         Attention:        Chief Financial Officer
         Phone:            (210) 661-6964
         Fax:              (210) 666-2830


Address for Mexico Subsidiary:

         Lancer de Mexico, S.A. de C.V.
         c/o Lancer Corporation
         235 West Turbo
         San Antonio, Texas   78216
         Attention:        Chief Financial Officer
         Phone:            (210) 661-6964
         Fax:              (210) 666-2830


Address for Parent Company:

         Lancer Corporation
         235 West Turbo
         San Antonio, Texas   78216
         Attention:        Chief Financial Officer
         Phone:            (210) 661-6964
         Fax:              (210) 666-2830


<PAGE>





                                   Annex B-11

                                     ANNEX B


                  17. 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.

                  18. 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.

                  19. All other  documents  requested by the Agent in connection
with this Amendment.