FIFTH AMENDMENT TO
CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of December 17, 1999, by and between Smithway Motor Xpress, Inc.
("Borrower"), Smithway Motor Xpress Corp. as Guarantor (the "Guarantor") and
LaSalle Bank National Association, formerly known as 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, a First Amendment to Credit Agreement dated as of
March 1, 1998, a Second Amendment to Credit Agreement dated as of March 15,
1998, a Third Amendment to Credit Agreement dated as of October 30, 1998, and a
Fourth Amendment to Credit Agreement dated as of August 20, 1999 (collectively
referred to as the "Agreement"); and
WHEREAS, the Borrower has requested certain modifications to the Agree-
ment and the Lender is willing to do so on the following terms and conditions;
and
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. Section 5.14 shall be amended by inserting the following
language at the end of the Section:
"Guarantor will deposit and maintain, and Guarantor will cause SMSD to
deposit and maintain, all of its cash in commercial deposit accounts
established by it at Lender."
3. Each of Sections 6.1, 6.2, 6.4, 6.5, 6.10, 6.11 and 6.12 of
the Agreement is amended to add at the end of such Section the following
sentence:
"Neither Borrower nor Guarantor shall suffer or permit any of their
respective Subsidiaries to take any action which this Section prohibits
Borrower from taking."
4. Section 6.1 of the Agreement is further amended to add the
following subsection:
"(g) Liens in favor of Lender."
5. Section 6.3 of the Agreement is amended to read in its
entirety as follows:
"6.3 Investments. Except in connection with the SMSD
Transactions, neither Borrower nor Guarantor shall purchase or acquire
or to commit to purchase or acquire, or suffer or permit any of their
respective Subsidiaries to purchase or acquire or to commit to purchase
or acquire, any capital stock, equity interest or other securities of,
or any interest in, any Person, or acquire substantially all the assets
of any Person unless
(a) the cost of such acquisition or purchase,
together with the cost of all other acquisitions made by
Guarantor and its Subsidiaries during Borrower's then current
fiscal year, does not exceed $15,000,000; and
(b) each new Subsidiary unconditionally
guarantees the Obligations in substantially the form attached
hereto as Exhibit B; and
(c) prior to or simultaneous with such acquisition or
purchase, Guarantor grants, or causes its applicable
Subsidiary to grant, to Lender a first priority, perfected
security interest in the securities and assets directly or
indirectly acquired in form and substance acceptable to
Lender.
6. Section 6.9 of the Agreement is revised and amended to read in
its entirety as follows:
"6.9 Indebtedness. The total consolidated Indebtedness
(excluding indebtedness between Guarantor's consolidated group of
companies outstanding pursuant to the SMSD Transactions) of Guarantor
and its Subsidiaries (including Borrower) shall not exceed $75,000,000.
Neither SMSD nor Guarantor will incur any unconsolidated Indebtedness
other than Indebtedness to Lender. The indebtedness of Borrower to SMSD
arising pursuant to SMSD Transactions shall not exceed $32,500,000
prior to September 30, 2000, $35,000,000 on or after September 30,
2000, but prior to September 30, 2001, $37,500,000 on or after
September 30, 2001, but prior to September 30, 2002. $40,300,000 on or
after September 30, 2002, but prior to September 30, 2003, and
$43,400,000 at anytime thereafter."
7. Section 6.10 of the Agreement shall be amended by inserting at
the end of the Section the following language:
"SMSD shall engage in no business or activity other than SMSD
Transactions, managing indebtedness within Guarantor's consolidated
group of companies, and incidental administrative activities related
thereto."
8. A new Section 6.14 shall be added to the Agreement and shall
read in its entirety as follows:
2
"6.14 Dividends. Guarantor and Borrower shall not pay any
dividends, or permit any of their respective Subsidiaries to
pay any dividends or make any distributions, except
(a) any Subsidiary of Guarantor may pay
dividends or make distributions to Borrower; and
(b) dividends and distributions as part of the
SMSD Transactions."
9. A new Section 6.15 shall be added to the Agreement and shall
read in its entirety as follows:
"6.15 Disposition of Assets. Borrower and Guarantor will not
sell or otherwise dispose of all or substantially all of their
respective assets, rights or properties, and will not permit any of
their respective Subsidiaries to sell or otherwise dispose of all or
substantially all of its assets, rights or properties."
10. A new Section 6.16 shall be added to the Agreement and shall
read in its entirety as follows:
"6.16 SMSD Transactions. Borrower, SMSD and/or Guarantor
will not engage in any SMSD Transaction unless
(a) the SMSD Transaction is in accordance with
applicable law;
(b) SMSD, in accordance with its dividend
policy, promptly dividends all cash payments it receives from
Borrower to Guarantor;
(c) Guarantor immediately loans to Borrower the
amount of all dividends received by Guarantor from SMSD; and
(d) Borrower's initial promissory note to Guarantor,
and each subsequent note to Guarantor, is evidenced by a
promissory note in substantially the form of Exhibit A to this
Amendment."
11. Section 9.1 is amended to add the following new definitions:
""SMSD" means SMSD Acquisition Corp., a South Dakota corpora-
tion and wholly-owned Subsidiary of Guarantor."
""SMSD Transactions" means the dividend of one or more
promissory notes up to the amount permitted under the Agreement to
Guarantor by Borrower, the
3
contribution of the notes to SMSD by Guarantor, the payment of
interest on the notes to SMSD by Borrower, the dividend of such
interest payments to Guarantor by SMSD, the lending of money in the
amount of such dividends to Borrower by Guarantor, and the issuance
of additional promissory notes to Guarantor by Borrower."
12. This Amendment will become effective upon the last to occur of
the following events:
(a) the execution and delivery of this Amendment by each
of Borrower, Guarantor and East West;
(b) the execution and delivery of a Guaranty by SMSD in
the form of Exhibit B hereto;
(c) the execution and delivery of a Security Agreement by
SMSD in the form of Exhibit C hereto;
(d) the execution and delivery to Lender of UCC-1 financing
statements naming SMSD as debtor and Lender as secured party suitable
for filing in the office of the Secretary of State of South Dakota and
Iowa and otherwise in form and substance acceptable to Lender;
(e) the execution and delivery to Lender of a Subordina-
tion Agreement in the form of Exhibit D by Borrower, Guarantor and
SMSD;
(f) the execution and delivery of a Secretary's Certificate of
SMSD to Lender certifying the articles of incorporation, by-laws,
authorizing board resolutions and incumbent officers of SMSD, in form
and substance acceptable to Lender;
(g) the delivery to Lender of a good standing certificate for
SMSD issued by the Secretary of State of South Dakota dated not earlier
than November 5, 1999;
(h) the delivery to Lender of a legal opinion of SMSD's
counsel substantially in the form of Exhibit E hereto;
(i) the delivery to Lender of a certificate of a Responsible
Officer of Borrower setting forth the nature and extent of all
insurance maintained by all Subsidiaries of Guarantor pursuant to
Section 5.6 of the Agreement and otherwise; and
(j) the delivery to Lender of standard lenders' loss payable
endorsements in favor of Lender on form ACCORD 27 with respect to the
insurance policies or other instruments or documents evidencing
insurance coverage on the properties of Borrower in accordance with
Section 5.6 of the Agreement and on the properties of all other
Subsidiaries of
4
Guarantor and endorsements to all such liability insurance policies
naming Lender as an additional insured thereunder.
13. Subject to the terms and conditions of this Amendment, Lender
consents to the SMSD Transactions and waives any violations of the Agreement
that may be caused by the consummation of the SMSD Transactions so long as the
SMSD Transactions are consummated expressly as set forth in this Amendment.
14. Borrower shall pay 50% of the legal fees incurred in connection
with the preparation of this Amendment and the documents and instruments
referred to herein, and shall pay 100% of all out of pocket costs incurred by
the Lender or its attorneys.
15. 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.
16. 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.
17. 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 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.
18. 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.
19. This Amendment may be executed in one or more counterparts, each
of which shall be deemed to be an original.
5
20. This Amendment was executed and 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 Fifth Amendment 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 Owens_______________
Title:_Executive Vice President_________
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn: G. Xxxxx Xxxxx
Facsimile: (000) 000-0000
Tel: (000) 000-0000
SMITHWAY MOTOR XPRESS CORP., as
Guarantor
By:____/s/ G. Xxxxx Owens_______________
Title:__Executive Vice President________
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn: G. Xxxxx Xxxxx
Facsimile: (000) 000-0000
Tel: (000) 000-0000
LASALLE BANK NATIONAL ASSOCIATION,
as Lender
By:____/s/ Xxxxx X. Chaika______________
Title:__Officer ________________________
Address notices and Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
6
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 Agreement and hereby consents to the Fifth
Amendment to the 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 Owens___________________
Title:__Executive Vice President______________
The undersigned, pursuant to that certain Guaranty dated as of
March 15, 1998, is a guarantor of all of the obligations of the Borrower to the
Lender under the terms of the Agreement and hereby consents to the Fifth
Amendment to the Agreement. Guarantor hereby reaffirms and ratifies his guaranty
as if the same were fully set forth herein.
EAST WEST MOTOR EXPRESS, INC., as Guarantor
By:____/s/G. Xxxxx Owens____________________
Title:__Executive Vice President ___________
