April 15, 2003
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: Fifth 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:
Smithway Motor Xpress, Inc.
April 15, 2003
Page 2
(a) Section (10) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(10) TERMINATION: AUTOMATIC RENEWAL.
THIS AGREEMENT SHALL BE IN EFFECT UPON EXECUTION OF THIS
AMENDMENT UNTIL APRIL 1, 2004 (THE "ORIGINAL TERM") AND
SHALL AUTOMATICALLY RENEW ITSELF FROM MONTH TO MONTH
THEREAFTER (EACH SUCH ONE-MONTH RENEWAL BEING REFERRED TO
HEREIN AS A "RENEWAL TERM") unless (A) THE DUE DATE OF THE
LIABILITIES IS ACCELERATED PURSUANT TO SECTION 16 HEREOF; OR
(B) A BORROWER OR LENDER ELECTS TO TERMINATE THIS AGREEMENT
AT THE END OF THE ORIGINAL TERM OR AT THE END OF ANY RENEWAL
TERM BY GIVING THE OTHER PARTY WRITTEN NOTICE OF SUCH
ELECTION AT LEAST FIFTEEN (15) DAYS PRIOR TO THE END OF THE
ORIGINAL TERM OR THE THEN CURRENT RENEWAL TERM IN WHICH CASE
BORROWERS SHALL PAY ALL OF THE LIABILITIES IN FULL ON THE
LAST DAY OF SUCH TERM. If one or more of the events
specified in clauses (a) and (b) occurs, then (i) Lender
shall not make any additional Loans on or after the date
identified as the date on which the Liabilities are to be
repaid; and (ii) this Agreement shall terminate on the date
thereafter that the Liabilities are paid in full. At such
time as Borrowers have repaid all of the Liabilities and
this Agreement has terminated, Borrowers shall deliver to
Lender a release, in form and substance satisfactory to
Lender, of all obligations and liabilities of Lender and its
officers, directors, employees, agents, parents,
subsidiaries and affiliates to such Borrowers, and if
Borrowers are obtaining new financing from another lender,
Borrowers shall deliver such lender's indemnification of
Lender, in form and substance satisfactory to Lender, for
checks which Lender has credited to such Borrower's account,
but which subsequently are dishonored for any reason or for
automatic clearinghouse or wire transfers not yet posted to
such Borrower's account.
Smithway Motor Xpress, Inc.
April 15, 2003
Page 3
(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) $12,000,000.00 at all times from January
1, 2003 through June 30, 2003; (ii) $13,000,000.00 at all
times from July 1, 2003 through December 31, 2003; (iii)
$14,000,000.00 at all times from January 1, 2004 through
December 31, 2004, and (iv) 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 December 31, 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 Ratio. Borrower hereby covenants and
agrees not to permit the Ratio of EBITDA to Fixed Charges
for each period set forth below to be less than the amount
set forth below for such period:
Smithway Motor Xpress, Inc.
April 15, 2003
Page 4
--------------------------------------------------------------
Period Amount
--------------------------------------------------------------
As of April 1, 2003 through April 30, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
As of April 1, 2003 through May 31, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
As of April 1, 2003 through June 30, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
As of April 1, 2003 through July 31, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through August 31, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through September 30, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
As of April 1, 2003 through October 31, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through November 30, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through December 31, 2003 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
As of April 1, 2003 through January 31, 2004 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through February 29, 2004 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
From April 1, 2003 through March 31, 2004 1.0 to 1.0
--------------------------------------------------------------
--------------------------------------------------------------
Each twelve month period thereafter 1.0 to 1.0
ending on the last day of each of
Borrower's fiscal months
--------------------------------------------------------------
Smithway Motor Xpress, Inc.
April 15, 2003
Page 5
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.
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxxxx
------------------------------
Title Sr VP
----------------------------
ACKNOWLEDGED AND AGREED TO
this ____ day of April, 2003:
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
Smithway Motor Xpress, Inc.
April 15, 2003
Page 6
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: April 15th, 2003
Smithway Motor Xpress Corp.
By: /s/ G. Xxxxx Xxxxx
--------------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: April 15th, 2003
