May 10, 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: First 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 amended to add the following
provision:
(iv) One-Time Fee: Borrowers shall pay to Lender a one-time fee of Ten
Thousand and No/100 Dollars ($10,000.00), which fee shall be
fully
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
May 10, 2002
Page 2
earned on the date of this Amendment and payable on May 31, 2002.
(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, 2002; (ii) $17,000,000.00 at all times from December 31, 2002
through December 30, 2003; 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 December 31, 2001 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 March 31, 2002 through May
31, 2002 for the period beginning January 1, 2002 and ending on
each
-2-
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
May 10, 2002
Page 3
such date, Borrowers shall not permit the ratio of the
Consolidated Group's EBITDA to Fixed Charges to be less than 0.40
to 1.0. As of the last day of each month from June 30, 2002
through August 31, 2002 for the period beginning January 1, 2002
and ending on each such date, Borrowers shall not permit the
ratio of the Consolidated Group's EBITDA to Fixed Charges to be
less than 0.50 to 1.0. As of the last day of each month from
September 30, 2002 through November 30, 2002 for the period
beginning January 1, 2002 and 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. 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.
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
------------------------------------
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
May 10, 2002
Page 4
ACKNOWLEDGED AND AGREED TO
this 10th day of May, 2002:
SMITHWAY MOTOR XPRESS, INC.
By /s/ Wm. X. Xxxxx
----------------------------
Xxxxxxx X. Xxxxx
Title President
EAST WEST MOTOR EXPRESS, INC.
By /s/ Wm. 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: May 10, 2002
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
May 10, 2002
Page 5
Smithway Motor Xpress Corp.
By: /s/ G. Xxxxx Xxxxx
----------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: May 10, 2002
M:\ABL\ABLLEGAL-LBNA\Smithway Motor\Ltr
Amend\1st_Amendmend-AM&RE_L&SA.doc
