November 8, 2002
Smithway 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: Second 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 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
Seven Thousand Five Hundred and No/100 Dollars ($7,500.00), which
fee shall
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
November 8, 2002
Page 2
be fully earned and payable upon execution of this Amendment.
(b) Subsection 14(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(a) Tangible Net Worth.
The Consolidated Group's Tangible Net Worth shall not at any time
be less than the Minimum Tangible Net Worth; "Minimum Tangible
Net Worth" being defined for purposes of this subsection as (i)
$16,000,000.00 at all times from March 31, 2002 through December
30, 2003; (ii) $17,000,000.00 at all times from December 31, 2003
through December 30, 2004; and (iii) thereafter, from the last
day of each Fiscal Year of the Consolidated Group through the day
prior to the last day of each immediately succeeding Fiscal Year
of the Consolidated Group, the Minimum Tangible Net Worth during
the immediately preceding period plus $1,000,000.00; and
"Tangible Net Worth" being defined for purposes of this
subsection as the Consolidated Group's shareholders' equity
(including retained earnings) less the book value of all
intangible assets as determined solely by Lender on a consistent
basis plus the amount of any LIFO reserve plus the amount of any
debt subordinated to Lender, all as determined under generally
accepted accounting principles applied on a basis consistent with
the financial statement dated September 30, 2002 except as set
forth herein;
(c) Subsection 14(c) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(c) Fixed Charge Coverage.
As of the last day of each month from October 31, 2002 through
December 31, 2002 for the period beginning January 1, 2002 and
ending on each such date, Borrowers shall not permit the
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East West Motor Express, Inc.
November 8, 2002
Page 3
ratio of the Consolidated Group's EBITDA to Fixed Charges to be
less than 0.75 to 1.0. As of the last day of each month from
January 31, 2003 through March 31, 2003, for the twelve (12)
month period ending on each such date, Borrowers shall not permit
the ratio of the Consolidated Group's EBITDA to Fixed Charges to
be less than 0.75 to 1.0. As of the last day of each month from
April 30, 2003 through May 30, 2003, for the twelve (12) month
period ending on each such date, Borrowers shall not permit the
ratio of the Consolidated Group's EBITDA to Fixed Charges to be
less than 0.80 to 1.0. As of the last day of May 31, 2003, for
the twelve (12) month period ending on such date, Borrowers shall
not permit the ratio of the Consolidated Group's EBITDA to Fixed
Charges to be less than 0.85 to 1.0. As of the last day of June
30, 2003 through July 30, 2003, for the twelve (12) month period
ending on each such date, Borrowers shall not permit the ratio of
the Consolidated Group's EBITDA to Fixed Charges to be less than
0.90 to 1.0. As of the last day of July 31, 2003 through August
30, 2003, for the twelve (12) month period ending on each such
date, Borrowers shall not permit the ratio of the Consolidated
Group's EBITDA to Fixed Charges to be less than 0.95 to 1.0. As
of the last day of August 31, 2003, for the twelve (12) month
period ending on such date, Borrowers shall not permit the ratio
of the Consolidated Group's EBITDA to Fixed Charges to be less
than 1.0 to 1.0. Thereafter, as of the last day of each month,
for the twelve (12) month period ending on such date, Borrowers
shall not permit the ratio of the Consolidated Group's EBITDA to
Fixed Charges to be less than 1.0 to 1.0.
2. This Amendment shall not become effective until fully executed by all
parties hereto.
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East West Motor Express, Inc.
November 8, 2002
Page 4
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.
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxx
--------------------------------
Title EVP/Counsel
--------------------------------
ACKNOWLEDGED AND AGREED TO
this ___ day of November, 2002:
SMITHWAY MOTOR XPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx, Pres.
------------------------------------
Xxxxxxx X. Xxxxx
Title President
EAST WEST MOTOR EXPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx, Pres.
------------------------------------
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: November 11, 0000
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Xxxxxxxx Motor Xpress, Inc.
East West Motor Express, Inc.
November 8, 2002
Page 5
Smithway Motor Xpress Corp.
By: /s/ G. Xxxxx Xxxxx
-------------------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: November 11, 2002
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