Xxxxx 0, 0000
Xxxxxxxx Motor Xpress, Inc.
0000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxx 00000
And
East West Motor Express, Inc.
0000 XX xxxxx
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Re: Third Amendment to Amended and Restated Loan and Security
Agreement
Gentlemen:
Smithway Motor Xpress, Inc., an Iowa corporation ("Smithway Inc.") and East
West Motor Express, Inc., a South Dakota corporation ("East West") (Smithway
Inc. and East West each a "Borrower" and collectively the "Borrowers") and
LaSalle Bank National Association, a national banking association ("Bank") have
entered into that certain Amended and Restated Loan and Security Agreement dated
December 28, 2001 (the "Security Agreement"). From time to time thereafter,
Borrowers and Bank may have executed various amendments (each an "Amendment" and
collectively the "Amendments") to the Security Agreement (the Security Agreement
and the Amendments hereinafter are referred to, collectively, as the
"Agreement"). Borrowers and Bank now desire to further amend the Agreement as
provided herein, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) Subsection 2(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
2. LOANS.
(a) Revolving Loans.
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
March 5, 2003
Page 2
Subject to the terms and conditions of this Agreement and the Other
Agreements, during the Original Term and any Renewal Term, Lender shall,
absent the occurrence of an Event of Default, make revolving loans and
advances to Borrowers' (the "Revolving Loans") in an amount up to the sum
of the following sublimits (the "Revolving Loan Limit"):
(i) Up to eighty-five percent (85%), or such lesser percentage as
determined by Lender in its sole discretion determined in good faith, of
the face amount (less maximum discounts, credits and allowances which may
be taken by or granted to Account Debtors in connection therewith in the
ordinary course of Borrowers' business) of Borrowers' Eligible Accounts
(consisting solely of Eligible Accounts other than those set forth at
subsection (ii) immediately below); plus
(ii) Up to eighty-five percent (85%), or such lesser percentage as
determined by Lender in its sole discretion determined in good faith, of
the face amount (less maximum discounts, credits and allowances which may
be taken by or granted to Account Debtors in connection therewith in the
ordinary course of Borrowers' business) of Borrowers' Eligible Accounts
(consisting solely of Accounts which are unbilled for three (3) days or
less) or Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00), whichever is less; plus
(iii) Up to One Million Two Hundred Fifty Thousand and No/100 Dollars
($1,250,000.00) as a Special Accommodation from March 4, 2003 through March
18, 2003; which shall reduce automatically to Two Hundred Fifty Thousand
and No/100 Dollars ($250,000.00) from March 19, 2003 through April 30,
2003, at which time, commencing May 1, 2003 and thereafter, such Special
Accommodation shall automatically reduce to zero ($0); minus
(iv) such reserves as Lender elects, in its sole discretion determined
in good faith to establish from time to time;
provided, that the Revolving Loan Limit shall in no event exceed Thirty-Two
Million Five Hundred Thousand and No/100 Dollars ($32,500,000.00) less the
then-outstanding principal balance of the Term Loans (the "Maximum
Revolving Loan Limit") except as such amount may be increased or, following
the occurrence of an Event of Default, decreased by Lender, in its sole
discretion.
The aggregate unpaid principal balance of the Revolving Loans shall
not at any time exceed the lesser of the (i) Revolving Loan Limit minus the
2
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
March 5, 2003
Page 3
Letter of Credit Obligations and (ii) the Maximum Revolving Loan Limit
minus the Letter of Credit Obligations. If at any time the outstanding
Revolving Loans exceeds either the Revolving Loan Limit or the Maximum
Revolving Loan Limit, in each case minus the Letter of Credit Obligations,
or any portion of the Revolving Loans and Letter of Credit Obligations
exceeds any applicable sublimit within the Revolving Loan Limit, Borrowers
shall immediately, and without the necessity of demand by Lender, pay to
Lender such amount as may be necessary to eliminate such excess and Lender
shall apply such payment to the Revolving Loans to eliminate such excess.
Each Borrower hereby authorizes Lender, in its sole discretion, to
charge any of such Borrower's accounts or advance Revolving Loans to make
any payments of principal, interest, fees, costs or expenses required to be
made under this Agreement or the Other Agreements.
A request for a Revolving Loan shall be made or shall be deemed to be
made, each in the following manner: the Borrower requesting such Revolving
Loan shall give Lender same day notice, no later than 10:30 A.M. (Chicago
time) for such day, of its request for a Revolving Loan as a Prime Rate
Loan. In the event that a Borrower maintains a controlled disbursement
account at Lender, each check presented for payment against such controlled
disbursement account and any other charge or request for payment against
such controlled disbursement account shall constitute a request for a
Revolving Loan as a Prime Rate Loan. As an accommodation to Borrowers,
Lender may permit telephone requests for Revolving Loans and electronic
transmittal of instructions, authorizations, agreements or reports to
Lender by Borrowers. Unless a Borrower specifically directs Lender in
writing not to accept or act upon telephonic or electronic communications
from such Borrower, Lender shall have no liability to Borrowers for any
loss or damage suffered by a Borrower as a result of Lender's honoring of
any requests, execution of any instructions, authorizations or agreements
or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Lender by a Borrower and
Lender shall have no duty to verify the origin of any such communication or
the authority of the Person sending it.
Each Borrower hereby irrevocably authorizes Lender to disburse the
proceeds of each Revolving Loan requested by such Borrower, or deemed to be
requested by such Borrower, as follows: the proceeds of each Revolving Loan
requested under Section 2(a) shall be disbursed by Lender in lawful money
of the United States of America in immediately available
3
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
March 5, 2003
Page 4
funds, by wire transfer or Automated Clearing House (ACH) transfer to such
bank account as may be agreed upon by such Borrower and Lender from time to
time, or elsewhere if pursuant to a written direction from such Borrower.
(b) Subsection 4(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
4. INTEREST, FEES AND CHARGES.
(a) Interest Rate.
Each Loan shall bear interest at the rate of two percent (2%) per
annum in excess of the Prime Rate in effect from time to time, payable on
the last Business Day of each month in arrears. Said rate of interest shall
increase or decrease by an amount equal to each increase or decrease in the
Prime Rate effective on the effective date of each such change in the Prime
Rate. Upon the occurrence of an Event of Default and during the continuance
thereof, each Loan shall bear interest at the rate of two percent (2%) per
annum in excess of the interest rate otherwise payable thereon, which
interest shall be payable on demand. All interest shall be calculated on
the basis of a 365-day year.
(c) Subsection 4(b) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(iv) One-Time Fee: Borrowers shall pay to Lender a one-time fee of
Twenty-Five Thousand and No/100 Dollars ($25,000.00), which fee
shall be fully earned and payable upon execution of this
Amendment.
2. This Amendment shall not become effective until fully executed by all
parties hereto.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to effectuate
the transactions contemplated hereby, the Agreement and Exhibit A thereto hereby
are ratified and confirmed by the parties hereto and remain in full force and
effect in accordance with the terms thereof.
4
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
March 5, 2003
Page 5
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxxxx
--------------------------------
Title Sr VP
-----------------------------
ACKNOWLEDGED AND AGREED TO
this 5th day of March, 2003:
SMITHWAY MOTOR XPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
Title: President
EAST WEST MOTOR EXPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
Title: President
Consented and agreed to by the following
guarantor(s) of the obligations of SMITHWAY
MOTOR XPRESS, INC. and EAST WEST MOTOR
EXPRESS, INC. to LASALLE BANK NATIONAL
ASSOCIATION.
SMSD ACQUISITION CORP.
By /s/ G. Xxxxx Xxxxx
-----------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: March 5, 2003
5
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
March 5, 2003
Page 6
SMITHWAY MOTOR XPRESS CORP.
By /s/ G. Xxxxx Xxxxx
-----------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: March 5, 2003
6
