SECOND AMENDMENT TO
CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Agreement") is entered
into as of March 15, 1998, by and between Smithway Motor Xpress, Inc.
("Borrower"), Smithway Motor Xpress Corp. as Guarantor (the "Guarantor") and
LaSalle National Bank, as Lender (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Guarantor entered into a Credit Agreement
dated as of September 3, 1997, and a First Amendment to Credit Agreement dated
as of March 1, 1998 and the parties agree that certain modifications are
required to the Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
1. Unless otherwise stated herein, all of the capitalized terms contained
in this document shall have the same meanings as contained in the Agreement.
2. The term "Borrowing Base" appearing in Section 9.1 hereof is hereby
deleted and in lieu thereof is inserted the following:
"Borrowing Base" means an amount as of any time of
determination equal to the sum of: (a) eighty five percent (85%) of
the aggregate amount of the Borrower's then existing Eligible
Accounts , plus (b) eighty five percent (85%) of the aggregate
amount of East West's then existing Eligible Accounts (which relate
to accounts owed or owing to East West), plus (c) seventy five
percent (75%) of the aggregate net book value of the Borrower's and
East West's unencumbered trucks and trailers. Net book value is
defined as the depreciated book value of all of Borrower's and East
West's trucks and trailers less all indebtedness and lease
obligations relating thereto.
3. Concurrently with the execution of this Amendment, East West Motor
Express, Inc. ("East West") shall execute a Guaranty, the form of which is
attached hereto as Exhibit A.
4. Borrower expressly acknowledges and agrees that all collateral,
security interests, liens, pledges, and mortgages heretofore, under this
Amendment, or hereafter granted to Lender, including, without limitation, such
collateral, security interests, liens, pledges and mortgages granted under the
Agreement, and all other supplements to the Agreement, extend to and cover all
of the obligations of Borrower to Lender, now existing or hereafter arising
including, without limitation, those arising in connection with the Agreement,
as amended by this Amendment, upon the terms set forth in such agreements, all
of which security interests, liens, pledges, and mortgages are hereby ratified,
reaffirmed, confirmed and approved.
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5. Borrower represents and warrants to Lender that (i) it has all
necessary power and authority to execute and deliver this Amendment and perform
its obligations hereunder, (ii) this Amendment and the Agreement, as amended
hereby, constitute the legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their terms, and (iii) all
representations and warranties of Borrower contained in the Agreement, as
amended, and all other agreements, instruments and other writings relating
thereto, are true, correct and complete as of the date hereof.
6. The parties hereto acknowledge and agree that the terms and provisions
of this Amendment amend, add to and constitute a part of the Agreement. Except
as expressly modified and amended by the terms of this Amendment, all of the
other terms and conditions of the Credit Agreement, as amended, and all
documents executed in connection therewith or referred to or incorporated
therein remain in full force and effect and are hereby ratified, reaffirmed,
confirmed and approved.
7. If there is an express conflict between the terms of this Amendment and
the terms of the Agreement, or any of the other agreements or documents executed
in connection therewith or referred to or incorporated therein, the terms of
this Amendment shall govern and control.
8. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original.
9. This Amendment was executed an delivered in Chicago, Illinois and shall
be governed by and construed in accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of Illinois.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year specified at the beginning hereof.
SMITHWAY MOTOR XPRESS, INC., as Borrower
By: /s/ G. Xxxxx Xxxxx
Title: Executive Vice President
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn:
Facsimile:
Tel:
2
LASALLE NATIONAL BANK, as Lender
By: /s/ Xxxxx Xxxxxx
Title: Senior Vice President
Address notices and Lending Office::
000 X. XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Facsimile: (000) 000-0000
Tel: (000) 000-0000
CONSENT AND RATIFICATION
The undersigned, pursuant to that certain Guaranty dated as of
September 3, 1997, is a guarantor of all of the obligations of the Borrower to
the Lender under the terms of the Credit Agreement dated as of September 3,
1997, as amended, and hereby consents to the Second Amendment to Credit
Agreement. Guarantor hereby reaffirms and ratifies his guaranty as if the same
were fully set forth herein.
SMITHWAY MOTOR XPRESS CORP, as Guarantor
By: /s/ G. Xxxxx Xxxxx
Title: Executive Vice President
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn:
Facsimile:
Tel:
T:\40934\09397\2ndAmendment.wpd 03/16/98
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EXHIBIT A
GUARANTY
For value received and in consideration of any and all loans,
advances or other financial accommodations provided by LASALLE NATIONAL BANK, a
national banking association (referred to herein, together with its successors,
assigns and transferees, as "Lender") to SMITHWAY MOTOR XPRESS, INC. (the
"Borrower"), including, but not limited to, the revolving loans described in
that certain Credit Agreement dated as of September 3, 1997, as thereafter
amended from time to time (the "Credit Agreement") entered into by Lender
Borrower, and the undersigned.
EAST WEST MOTOR EXPRESS, INC., a South Dakota corporation
("Guarantor"), derives a substantial financial benefit from the Borrower, and
hereby unconditionally, irrevocably and absolutely guarantees (a) the full and
prompt payment, when due, whether at maturity or earlier by reason of
acceleration or otherwise, and at all times thereafter of all obligations of the
Borrower to Lender whenever and however created, including, but not limited to,
obligations of the Borrower with respect to payment of the principal of,
prepayment charges (if any) and interest on the Loans (including interest on any
overdue principal and prepayment charges, if any, and, to the extent permitted
by law, on any overdue interest), and all other amounts due to Lender under the
Credit Agreement and the other Loan Documents (this and all other capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
thereto in the Credit Agreement), and (b) the prompt and faithful performance,
discharge and observance of any of all other obligations, covenants, agreements,
conditions, representations, warranties, indemnities and liabilities of the
Borrower to be performed, discharged or observed by the Borrower under or
pursuant to any agreement of the Borrower with Lender, including, but not
limited to the Credit Agreement, the other Loan Documents, and all agreements,
instruments and documents executed or delivered in connection therewith or
pursuant thereto (all such obligations of the Borrower guaranteed by the
Guarantor herein being hereinafter called the "Obligations"). If the Borrower
defaults in the payment when due of any of the Obligations (whether at their
stated maturity, by acceleration, or otherwise), the Guarantor shall pay to the
unpaid holders of the Obligations (the "Holders"), on demand, the full amount of
such Obligations in immediately available funds at the place provided in the
relevant document. The Guarantor further agrees to pay (a) all costs and
expenses including, without limitation, all court costs and reasonable
attorneys' fees and expenses paid or incurred by each of the Holders in
endeavoring to collect all or any part of the Obligations from, or in
prosecuting any action against, the Borrower, the Guarantor, or any other
guarantor of all or any part of the Obligations or in endeavoring to realize
upon any or all collateral (including, but not limited to Collateral as defined
under any of the Credit Agreement or the other Loan Documents), and (b) to the
extent permitted by law, interest on the Obligations and such costs and expenses
at the applicable per annum rate set forth in the relevant document.
The Guarantor hereby represents and warrants that:
(a) The Guarantor has full power, authority and legal right to
execute this Guaranty.
(b) This Guaranty has been duly authorized, executed and delivered
by the Guarantor and constitutes a legal, valid and binding obligation of the
Guarantor enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws relative to or affecting the
enforcement of creditors' rights generally in effect from time to time and by
general principles of equity.
(c) No consent, approval or authorization of or filing with any
Governmental Body or other Person on the part of the Guarantor is required in
connection with this Guaranty, except such consents, approvals and
authorizations, if any, as have been obtained.
(d) The execution, delivery and performance of this Guaranty will
not violate any provision of any applicable law or regulation or of any Order,
domestic or foreign, or of the articles or bylaws of the Guarantor or of any
securities issued by the Guarantor or of any mortgage, indenture, lease,
contract, or loan agreement to which the Guarantor is a party, or any other
agreement, instrument or undertaking to which the Guarantor is a party or which
purports to be binding upon the Guarantor or upon any of its assets, and will
not result in the creation or imposition of any Lien on any of the assets of the
Guarantor except as contemplated by this Guaranty, the Credit Agreement, the
other Loan Documents or any other agreements between the Borrower and Lender.
The Guarantor hereby waives notice of acceptance of this Guaranty by
any Holder, of any action taken or omitted in reliance hereon or of any default
in the payment of any of the Obligations or in the performance of any covenants
and agreements of the Borrower contained in the Credit Agreement or any of the
other Loan Documents or any other agreement between the Borrower and Lender, and
any diligence, presentment, demand, protest, dishonor or notice of any kind.
This Guaranty constitutes a present and continuing guaranty of
payment and performance and not of collection of the Obligations, and shall be
absolute, primary, present and unconditional; and to the extent permitted by
applicable law, shall not be subject to any counterclaim, setoff, reduction or
defense based upon any claim the Guarantor may have against the Borrower or any
other Person and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected or impaired by any
thing, event, happening, matter, circumstance or condition whatsoever (whether
or not the Guarantor shall have any knowledge or notice thereof or shall consent
thereto), including, without limitation:
(i) any amendment or other modification of or supplement
to any provision of any agreement or document between the Borrower
and Lender, including, but not limited to the Credit Agreement or
any other Loan Document or any assignment or transfer thereof,
including without limitation any renewal or extension of the terms
of payment of any of the Loans or any other indebtedness of the
Borrower to Lender or the granting of time in respect of any payment
thereof, or any furnishing or acceptance of security or any release
of any security furnished or accepted for any of the Obligations;
(ii) any waiver, consent, extension, granting of time,
forbearance, indulgence or other action or inaction under or in
respect of this Guaranty, the Credit Agreement, the other Loan
Documents, or any other agreements between the Borrower and Lender
or any of the Loans or other indebtedness of the Borrower to Lender
or any exercise or non-exercise of any right, remedy or power in
respect hereof or thereof;
(iii) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or similar
proceedings with respect to the Borrower or any other Person except
the Guarantor, or the properties or creditors of any of them;
(iv) the occurrence of any event of default or event
which, with the giving of notice or lapse of time, or both, would
become an event of default, as defined under the relevant document,
or any invalidity or unenforceability of, or any misrepresentation,
irregularity or other defect in, the Credit Agreement, the other
Loan Documents, or any other agreement between the Borrower and
Lender;
(v) any transfer of any assets to or from the Guarantor
or the Borrower, including without limitation any transfer or
purported transfer to the Guarantor or the Borrower from any Person,
any invalidity, illegality of, or inability to enforce, any such
transfer or purported transfer, any consolidation or merger of the
Guarantor or the Borrower with or into any other corporation or
entity, or any change whatsoever in the objects, capital structure,
constitution or business of the Guarantor or the Borrower or any
Affiliate or Subsidiary of the Guarantor or of the Borrower;
(vi) any failure on the part of the Borrower or any
other Person to perform or comply with any term of the Loans, the
Credit Agreement, the other Loan Documents, or any other agreement
between the Borrower and Lender;
(vii) any suit or other action brought by the Guarantor,
the Borrower or any other Person, or by any partner, stockholder or
creditor of any of such Persons, for any reason whatsoever,
including without limitation any suit or action in any way attacking
or involving any issue, matter or thing in respect of the Loans, the
Credit Agreement, the other Loan Documents, or any other agreement
between the Borrower and Lender;
(viii) any lack or limitation of status or power,
incapacity or disability of the Borrower or of any officer, director
or agent of the Borrower or any of its stockholders;
(ix) the cessation from any cause whatsoever (other than
payment of the Obligations) of liability of the Borrower;
(x) the termination of, or release or compromise of the
Credit Agreement, the other Loan Documents, or any other agreement
between the Borrower and Lender or any other agreement or document
executed or delivered in connection therewith or pursuant thereto
(other than as a result of payment of the Obligations);
(xi) any lack or limitation of the genuineness,
validity, regularity or enforceability of the Credit Agreement, any
Loan Document, any other Loan Document or any other agreement
between the Borrower and Lender or any other agreement or document
executed or delivered in connection therewith or pursuant thereto;
(xii) any failure by any of the Holders to take any
steps to perfect or maintain any security interest in or Liens upon,
or to preserve their rights to any security or collateral for the
Obligations;
(xiii) any election by any of the Holders, in any
proceeding instituted under Chapter 11 of Title 11 of the United
States Code (11 U.S.C. ss. 101 et seq.) (the "Bankruptcy Code"), of
the application of Section 1111(b)(2) of the Bankruptcy Code;
(xiv) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of any of the Holders' claims
for repayment of the Obligations;
(xv) any failure to pursue or enforce any rights or
remedies which any of the Holders may have against any other
guarantor of the Obligations, or any of them; or
(xvi) any other thing, event, happening, matter,
circumstance or condition whatsoever, not in any way limited to the
foregoing, which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
Notwithstanding anything to the contrary contained herein or in any
other agreement, document or instrument, the Guarantor hereby irrevocably waives
, until such time as the Obligations have been paid in full, all rights of
subrogation (whether such rights arise under common law, contract or federal law
(including, without limitation, Section 509 of the Bankruptcy Code)) to the
claims of the Holders against the Borrower, and waives all contractual,
statutory and common law rights of contribution, reimbursement, indemnification
and similar rights and claims (as such term is defined in the Bankruptcy Code)
against the Borrower which may arise in connection with, or as a result of, this
Guaranty.
The Guarantor expressly waives any right it may have to require any
Person seeking enforcement of its obligations hereunder to (a) proceed against
the Borrower or any other guarantor or Person, (b) proceed against or exhaust
any security, or (c) pursue any other remedy in the power
of the Person seeking such enforcement. The Holders from time to time may, at
their election, exercise any right or remedy they may have against the
Guarantor, including, without limitation, the right to foreclose upon any such
security by judicial or non-judicial sale, without affecting or limiting in any
way the liability of the Guarantor hereunder, except to the extent the
Obligations have been paid. The Guarantor waives any defense arising out of the
absence, impairment or loss of any right of reimbursement, contribution or
subrogation or any other right or remedy of the Guarantor against the Borrower
or any such security, whether resulting from such election by the Holders of the
Obligations or otherwise.
The Guarantor agrees that its obligations hereunder shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of the Borrower or the Guarantor is rescinded or must be otherwise
restored by any Holder of any Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise. The Guarantor further
agrees that, without limiting the generality of the foregoing, if an event of
default shall have occurred and be continuing and any Holder is prevented by
applicable law from exercising any remedy under this Guaranty or under any of
the Obligations, such Holder shall be entitled to receive from the Guarantor
upon demand therefor, the sums which would otherwise have been due from the
Borrower had such remedies been exercised.
The Guarantor agrees that this Guaranty shall continue in full force
and effect and may not be terminated or otherwise revoked by the Guarantor until
the Obligations shall have been fully discharged.
This Guaranty shall be binding upon the Guarantor and upon the
successors and assigns of the Guarantor and shall inure to the benefit of Lender
and each other Holder and their respective successors and assigns; all
references herein to the Borrower and to the Guarantor shall be deemed to
include their respective successors and permitted assigns, including, without
limitation, a receiver, trustee or debtor-in-possession of or for the Borrower
or the Guarantor. All references to the singular shall be deemed to include the
plural where the context so requires.
THIS GUARANTY SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO CONFLICTS OF LAW PROVISIONS) AND THE DECISIONS OF THE STATE OF
ILLINOIS.
THE GUARANTOR HEREBY CONSENTS AND AGREES TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF XXXX, STATE OF ILLINOIS, AND
WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY
ACTION INSTITUTED THEREIN, AND AGREES THAT ANY DISPUTE CONCERNING THE
RELATIONSHIP BETWEEN LENDER OR HOLDERS OF OBLIGATIONS, ON THE ONE HAND, AND THE
GUARANTOR, ON THE OTHER HAND, OR THE CONDUCT OF ANY PARTY IN CONNECTION WITH
THIS GUARANTY OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
THE GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTY OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
THE GUARANTOR IN RESPECT OF THIS GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE GUARANTOR HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS GUARANTY WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE GUARANTOR TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantor as of the 15th day of March, 1998.
EAST WEST MOTOR EXPRESS, INC., a South Dakota
corporation
By: /s/ Xxxxxxx X. Xxxxx
Title: Director
